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Insurance Broking and Distribution - Brightside Group

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					   Insurance Broking and Distribution
Interim results for the six months ended 30 June 2012
                                                                        Insurance broking and distribution



    We distribute market-leading personal and business insurance
    products online and through our UK call centres.



    Seeing things differently
    We use our unique business model to benefit both our
    customers and our insurance partners. In validating all
    customer details on application we ensure that security
    comes as standard with every policy.

    This innovative approach, alongside with our strong sales
    culture, enables us to channel this security to deliver effective
    and profitable cross-selling throughout the business.

    Using these strengths to distribute an increasingly
    diverse portfolio, Brightside has quickly become a UK
    Top 20 Insurance Broker*, demonstrating some of the
    fastest growth across the industry.




4   *Insurance Times. September 2012
        Brightside Group plc Interim Results 2012
Contents

Financial and Operational Highlights                                               01

Chief Executive’s Review                                                           04

Consolidated Statement of Comprehensive Income                                     13

Consolidated Balance Sheet                                                         14

Consolidated Cash Flow Statement                                                   15

Consolidated Statement of Changes in Shareholders’ Equity                          16

Notes to the Consolidated Financial Information                                    17

Corporate Directory                                                                38




                                                            Brightside Group plc Interim Results 2012   5
     Another Record Year
     For Brightside
     Financial Highlights
     Brightside, the specialist
     insurance broker, is pleased
                                                         +
                                                           10%                2012 H1 £43.6m
                                                        Revenue            2011 H1 £39.8m
     to announce record                                            REVENUE INCREASED BY 10%
     unaudited interim results for
     the six months ended 30 June
     2012 and a 0.22p per share
                                                         +
                                                           14%                        2012 H1 £8.2m
                                                         Pre-tax
     maiden interim dividend.                                               2011 H1 £7.2m
                                                          Profit   PROFIT BEFORE TAX INCREASED BY 14%




                                                           19%                                     2012 H1 19%
                                                      Net Profit             2011 H1 18%
                                                        Margin     NET PROFIT MARGIN INCREASED TO 19%



                                                         +
                                                           13%                     2012 H1 1.24p
                                                           Basic            2011 H1 1.10p
                                                        Earnings   BASIC EARNINGS PER SHARE INCREASED BY 13%



                                                         +
                                                           16%                          2012 H1 £74.0m
                                                        Balance            2011 H1 £63.7m
                                                          Sheet    TOTAL EQUITY INCREASED BY 16%




                                                     £11.1m                                    2012 H1 £11.1m
                                                       Operating            2011 H1 £9.9m
                                                      Cash Flows   OPERATING CASH FLOWS AND £15M REDUCTION IN EXTERNAL DEBT




                                                         .22p                             2012 H1 .22p
                                                       Dividend    STRONG PERFORMANCE FACILITIES MAIDEN INTERIM DIVIDEND OF
                                                                   .22P PER ORDINARY SHARE




01       Brightside Group plc Interim Results 2012
Operational Highlights
       +
        3%      2012 H1 194,808
       Policy          2011 H1 189,608

        Sales   CORE MARKET POLICY SALES INCREASED BY 3%



   +
     19%                       2012 H1 130,487
    Finance            2011 H1 109,302

Agreements      PANACEA FINANCE FUNDING AGREEMENTS
                INCREASED BY 19%




• Listed in Insurance Times Top 20 Brokers.

• Premium finance funding facility provided by
   Clydesdale Bank renewed.

• Successful launch of white labelled ASDA Money and
   Debenhams insurance products commenced in July 2012.

• Acquisition of head office building in February 2012 for £3m.




                                                           Brightside Group plc Interim Results 2012   02
     What we do
     Our business model




     • Our core business is insurance broking;
     •	 We provide both personal lines and commercial products;
     •	 We transact online and through call centres;
     •	 As a broker we are not exposed to underwriting risk;
        	
     •	 To support our broking businesses we generate our own leads and offer
        our own premium finance product to our customers; and

     •	 Through this approach we have cemented our position within the top 20
        insurance brokers in the country.



03        Brightside Group plc Interim Results 2012
Chief Executive’s Review
                              I am pleased to report my first interim results as the newly
                              appointed Chief Executive of Brightside. Having been central
                              to the Group and its successful growth story since 2002 my
                              focus remains on maintaining growth, and unlocking the
                              significant opportunities that exist within our £14 billion market
                              for brokered insurance products.
                              Although some areas of the business have reached a scale which would be
                              the envy of many brokers, I believe that there remains potential for further
                              growth across both personal and commercial product lines.
      Overall, the first      I am also pleased to announce the               Importantly, policy sales in the areas
half of 2012 has seen         declaration of our maiden dividend              where we are focused were 194,808
the Group continue to         payment of 0.22p per ordinary share,
                              an interim dividend for the period ending
                                                                              (2011: 189,608), an increase of 3% -
                                                                              further commentary on policy sales is
build upon the record         31 December 2012, which will be paid            provided later in this report.
results it achieved in        to shareholders 26 October 2012.
                              The Board has stated for some time              These results translate into a basic
2011 with another             that it is committed to the principle of        earnings per share of 1.24p (2011:
                              dividend payments, and that the timing of       1.10p) an increase of 13% on the prior
strong performance            these payments would be subject to the          year, and an increase of 91% on 2010
demonstrating growth          availability of cash resources, ongoing         (0.65p per share) clearly demonstrating
                                                                              the success of our recent strategy.
                              bank facilities and the level of deferred
in the key metrics of         consideration payments due on recent            The earnings per share adjusted for
revenue and profitability”.   acquisitions. The general and premium           share based payments, amortization
                                                                              of intangibles and exceptional items is
                              finance facilities from Clydesdale Bank
                              PLC were successfully renewed in                1.73p (2011: 1.61p, 2010: 0.84p)
                              August 2012 and while further deferred          representing a 106% increase on 2010.
Martyn Holman
                              consideration payments remain
CEO Brightside Group plc                                                      As part of our growth story,
                              outstanding on the acquisition of the
                                                                              the successful launch of Brightside’s
                              eCar policy book and the eSystems on
                                                                              white labeled Asda Money and
                              line platform, the Board has sufficient
                                                                              Debenhams insurance products in
                              cash flow visibility and headroom to
                                                                              July 2012 represents a new chapter
                              allow for the commencement of dividend
                                                                              for the Group. The full impact of these
                              payments. Looking forward, the Board
                                                                              partnerships will not be realised for
                              expects to be able to follow a progressive
                                                                              another 12 to 18 months, however,
                              and sustainable dividend policy.
                                                                              the initial results in terms of policy count
                              Overall, the first half of 2012 has seen        are promising with 2,300 sales in July
                              the Group continue to build upon the            and August 2012 alone.
                              record results it achieved in 2011 with
                                                                              Working in partnership with other large
                              another strong performance demonstrating
                                                                              brands across a wide range of sectors
                              growth in the key metrics of revenue and
                                                                              represents a considerable opportunity to
                              profitability. The Group generated
                                                                              develop Brightside’s distribution reach,
                              revenue of £43.6m (2011: £39.8m),
                                                                              both in personal and commercial lines.
                              an increase of 10% on the prior year and
                                                                              We will continue to explore and secure
                              pre-tax profits of £8.2m (2011: £7.2m),
                                                                              these opportunities.
                              an increase of 14%. In the same period,
                              total policy sales were 227,610 (2011:
                              240,665), a decrease of 5% reflecting our
                              strategy of focusing on profitable business
                              rather than policy volume.




                                                                            Brightside Group plc Interim Results 2012        04
     Brightside & the insurance market
     Brightside is a distributor of insurance products and ancillary services
     which, importantly, do not carry underwriting risk. The Brightside
     strategy is to partner with underwriters, providing those underwriters
     with a reliable source of quality business where the clients’ risk details
     have been verified to ensure their completeness and accuracy.
     This provides an exceptional route to market for underwriters which
     supports their loss ratios and therefore reinforces Brightside as a
     broker of choice when allocating their insurance capital.


     In terms of insurance underwriting, and in         increasingly shop around to find the
     particular the motor market, the hardening         cheapest premium, with brokers often
     of the market has ceased and we are now            reducing their margins as a result in order
     entering a period of stability. History tells      to retain existing business and acquire
     us that there should be a downturn in              new business. Similarly falling premiums
     rates within the next six months but, with         (“a Softening Market”) provides support
     Solvency II looming and insurers still trying      to renewal retention, however it can often
     to rebuild reserves and the gender initiative      lead to lower commission income and
     still occupying the minds of underwriters’,        lower new business opportunities as
     the static market cycle may last a little          customers are less likely to move from
     longer. In terms of the non-motor sector           their existing providers and shop around.
     the market remains very competitive with
     little in the way of premium inflation.            The growth of internet distribution,
                                                        combined with the effects of the recent
     As a broker our strategy is to continue            hardening market, is radically changing
     driving forward in our traditional areas of        the landscape for consumers, brokers
     strength, being broking to the SME and             and insurers alike.
     motor sectors (comprising both commercial
     and personal lines products) combined              Historically the online insurance sales
     with a further focus on improving our              process has relied upon self-certification
     processes to derive better profitability.          by customers. Combined with the
     In addition we continue to explore sectors         emergence of number plate recognition,
     and routes to market where historically            compelling drivers to obtain some form
     we have not traded or currently have               of insurance cover, the market has
     a sub-scale offering, such as large                experienced a significant increase in the
     commercial and online commercial                   prevalence of non-disclosure and fraud.
     policies, to ascertain the market size and         Importantly for insurers, once an insurance
     potential profitability. In following this         certificate has been issued the insurer is
     strategy we continue to develop and                liable for any third-party claims regardless
     deploy our technology, and in particular           of the accuracy of the original details
     the Quote Exchange technology acquired             submitted by the customer. Therefore, in
     in 2011 with the aim of gaining a market           response to increasing levels of fraud and
     edge to drive down acquisition cost and            rising claims costs insurance premiums
     further improve profitability.                     in the motor sector have risen sharply.

     For insurance brokers, hardening and               To counter increasing levels of online
     softening markets represent both a                 non-disclosure and fraud being experienced
     threat and an opportunity, probably in             throughout the industry Brightside
     equal measures. As many insurance                  validates all customer details once a
     products are sold by brokers on a                  policy is sold to help safeguard our insurer
     commission basis, rising premiums                  partners. Through our commitment to fight
     (“a Hardening Market”) theoretically leads         fraud and to penalise non-disclosure we
     to rising incomes for brokers. However             aim to protect the results of our insurer
     rising premiums also lead to additional            partners, therefore enabling us to obtain
     customer churn as customers                        preferential terms from insurers.




05          Brightside Group plc Interim Results 2012
H1 2012 Results
In light of the market conditions experienced during the first half of 2012 we are particularly
pleased with the performance of our broking units. Our focus during this period has been on
the continued development of the eCar panel and the successful launch of white label
product offerings for Asda Money and Debenhams.

We have made good progress in both          Our white label partnerships with Asda           Discussions continue regarding
of these areas. To support the growth       Money and Debenhams were successfully            opportunities to expand the panel offering
and development of our eCar offering,       launched in July 2012. While it is too early     and further insurance partnerships to
we have introduced a specialist             to predict the long term success of these        ensure that we have the necessary
eCommerce team dedicated to the             partnerships, I am pleased to report that        capacity to meet our growth plans.
maximization of income and sales            by the end of August 2012 we had sold
opportunities. Combined with customer       2,300 policies under our white label
journey enhancements and the introduction   partnerships which represent both a
of automated customer validation            strong and extremely positive start.
methods we are aiming to increase
both eCar policy sales and improve the
margin achieved on sales made.
                                                                                                    As part of our
                                                                                             growth story, the successful
                                                                                             launch of Brightside’s white
                                                                                             labeled Asda Money and
                                                                                             Debenhams insurance
                                                                                             products in July 2012
                                                                                             represents a new chapter
                                                                                             for the Group”

                                                                                             Martyn Holman
                                                                                             CEO Brightside Group plc




                                                                                           Brightside Group plc Interim Results 2012      06
      Insurance Broking

      Policy Type                                                                 2012                      2011                         %

      eCar                                                                       78,221                     70,561                      11%

      eBike                                                                      23,279                     22,990                       1%

      Van Insurance                                                              58,653                     62,486                      -6%

      Commercial                                                                 17,901                     17,753                       1%

      Personal Lines, Taxi & Minibus                                             16,754                     15,818                       6%

      Total annual policies                                                     194,808                    189,608                       3%



      Total monthly policies                                                     26,227                     33,873                      -23%



      Online Home                                                                 2,570                     9,976                       -74%

      GAP                                                                         3,744                     5,455                       -31%

      Life                                                                         261                      1,753                       -85%

      Total other policies                                                        6,575                     17,184                      -62%



      Total*                                                                    227,610                    240,665                      -5%




     * Included in 2012 policy sales numbers are           Liverpool Victoria and Royal Sun Alliance       As reported in our 2011 annual results,
     26,227 monthly policies (2011: 33,873).               are expected to join the panel in the           sales of our on-line home insurance
     All other policy sales included in the table          short to medium term. This is expected          product fell sharply following a significant
     above are annual policy sales.                        to lead to a further dilution in the level of   increase in prices from the product
                                                           Southern Rock underwritten business.            underwriter, AVIVA which ultimately
     In addition, in 2012 the Group sold a further         However the online car insurance sector         rendered the product uncompetitive in its
     14,834 eCar short term insurance policies             remains extremely competitive. Therefore        current form and this trend has continued
     (2011: 35,298), these policies have an                in adding new capacity to our eCar panel        into the first half of 2012. We are currently
     average duration of two to three days.                we continue to seek niche offerings and         working to obtain a more competitive
                                                           more flexible underwriting products which       pricing structure for the existing product,
     Overall, policy sales have fallen by 5%
                                                           can support the differentiation of eCar         while also seeking additional underwriters
     from 240,665 in the first half of 2011 to
                                                           from other brands offered on aggregators.       to ultimately provide a panel solution for
     227,610 in the same period in 2012.
                                                                                                           this product.
     This represents a strategy of focusing on             The growth in personal lines policy sales
     our most profitable products and we have              has been achieved through a marked              Following a previous decision to scale back
     seen, on average, a 3% increase in those              improvement in quote to sale conversion         our life insurance brokerage we have taken
     areas where we are most focused.                      rates in the first half of the year due to an   the decision during the first half of 2012 to
                                                           increased focus on the quality of the lead      cease the sale of new policies. We continue
     In terms of policy sales eCar remains
                                                           opportunities provided.                         to provide a service to our existing policy
     central to the success of the Group
                                                                                                           holders in order to limit any potential claw
     following a strategic move away from                  For van policies, we have seen a slight         back resulting from the cancellation of our
     product lines such as online home and                 decline in our renewal retention rate and       existing policy base.
     life policies as previously disclosed.                new business sales in the context of
                                                           increasing market competition for van
     During the first half of 2012 eCar sold
                                                           sales, particularly online from competitors
     78,221 annual policies, an increase of
                                                           like the Van Insurer and VanCompare.
     11% on the prior year. The eCar panel of
                                                           Our strategy is to continue to focus on
     insurers, currently consisting of Southern
                                                           writing profitable online van sales and we
     Rock, AVIVA, AXA, Ageas and Groupama
                                                           have protected our income per policy in
     continues to develop, with non-Southern
                                                           the first half of 2012.
     Rock panel members comprising 28% of
     annual eCar policy sales in the
     second quarter.




07             Brightside Group plc Interim Results 2012
Premium finance                                  Lead generation                                  Quote Exchange
During the period the premium finance            The growth in our insurance broking              Quote Exchange, which was acquired
unit processed 130,487 loans (2011:              business has been largely supported              by the Group in February 2011, designs
109,302 loans). These loans represented          by the significant efforts of our lead           and builds specialist technology which is
£81.3m of new premium finance (2011:             generation business, which is continuing         used by price comparison and aggregator
£67.3m), of which £68.3m or 109,000              to implement its strategy of generating low      websites to obtain and deliver price
loans were funded on the Group’s internal        cost and high converting opportunities for       comparison data for the end user.
loan book (2011: £58.6m or 96,000).              the Group. During the six month period
                                                 ended 30 June 2012 the unit generated            During the period the Group has been
The increase in the volume and value of          124,668 leads (2011: 138,581).                   working to further harness the power of
loans processed is a direct result of the        The majority of the leads generated were         Quote Exchange’s technology platforms
increase in the number of insurance policies     used internally by the Group’s insurance         to complement and enhance its
sold by the Group’s brokerages, and also         broking businesses, with the balance             e-commerce operation and lead generation
the increase in the average gross written        sold externally. The reduction in the            businesses. Externally Quote Exchange,
premium per policy as a result of the            number of leads generated compared               which currently provides approximately
on-going hard market. In particular, there       to the same period in 2011 is due to the         73.5 million price comparison quotes per
has been an increase in the proportion           continued change in the operational              month to users of comparison websites
of eCar policies that take up premium            focus of this business, supported by the         such as MoneySupermarket and
financing throughout the period.                 introduction of a new telephone system,          Comparethemarket continues to work
                                                 and is focused on providing better quality       with these price comparison sites and
The ability to finance policies internally is                                                     other customers to develop new solutions
                                                 and profitable leads to the broking units,
particularly important to the Group as it is                                                      and products. The first six months of
                                                 rather than achieving volumes of
able to earn greater revenue from funding                                                         2012 has seen increases in the proportion
                                                 internal and external transfers. As a result
loans internally using cash balances or                                                           of aggregation panels that are managed
                                                 of this, the average cost of acquisition has
bank funding rather than using third party                                                        by Quote Exchange.
                                                 reduced by £10 from £95 in the first half
premium finance providers such as Close
                                                 of 2011 to £85 in the first half of 2012.
Premium Finance. During the period our                                                            With the current distribution model for
ability to fund premium finance through our      Going forward, the lead generation effort        insurance products relying heavily on the
balance sheet was reinforced by the renewal      remains central to the Group in terms            application of price comparison solutions
of our revolving loan facility with Clydesdale   of its ability to continue to drive forward      the acquisition of Quote Exchange has
Bank. This demonstrates Clydesdale’s             the insurance broking businesses.                secured access to this technology whilst
continued backing and commitment to              Therefore continued focus is being placed        also providing an important tool for the
our business model.                              on ensuring the unit is operating at             company and its strategic partners
                                                 maximum efficiency and generating leads          looking to maximise income from
As a result of increasing the amount of                                                           potential customers.
                                                 at the lowest possible cost to the Group.
business funded via our internal loan
book, the loan book stood at £53.8m
at 30 June 2012 (2011: £41.6m).
The associated deferred interest held on
our balance sheet at 30 June 2012 was
£5.1m (2011: £3.9m). This deferred interest
relates to interest income that will be
received and recognised in the Statement
of Comprehensive Income over the next
10 months from loans which we provided
                                                                                                          The growth in our
to Group customers prior to 30 June
2012. This indicates a significant increase                                                       insurance broking business
in the profitability of Panacea which will                                                        has been largely supported
flow through the Income Statement in                                                              by the significant efforts of
the second half of 2012.
                                                                                                  our lead generation business,
                                                                                                  which is continuing to
                                                                                                  implement its strategy of
                                                                                                  generating low cost and
                                                                                                  high converting opportunities
                                                                                                  for the Group.

                                                                                                  Martyn Holman
                                                                                                  CEO Brightside Group plc




                                                                                                Brightside Group plc Interim Results 2012     08
     Medical reporting                                  Balance sheet
     The medical reporting agency, Injury               At 30 June 2012 total Group assets             For eBike, the deferred consideration
     QED, continues to expand its activities            stood at £144m (December 2011: £138m).         earn out period ran from 1 July 2010
     in line with its vision of becoming a one          The £6.6m increase in total assets is          to 30 June 2011. Due to the strong
     stop shop for personal injury solicitors           primarily due to non-current assets            performance of eBike during the earn out
     and life insurers. In order to deliver its                                                        period the maximum deferred consideration
                                                        increasing by £3.0m, trade and other
     vision the unit has continued to focus on                                                         of £1.5m was paid in August 2012.
                                                        receivables increasing by £9.2m, offset by
     implementing its strategy of increasing the
     number of parties from whom it receives            a £5.6m fall in Group cash balance.            The earn out period for eCar ran from
     medical reporting referrals, whilst also                                                          1 July 2011 to 30 June 2012. Under the
                                                        The increase in non-current assets is          terms of the sale and purchase
     increasing its product offering to include
                                                        primarily a result of the acquisition of the   agreement the maximum deferred
     a number of complementary services.
                                                        corporate head office, the MMT Centre,         consideration payable was capped at
     Additional complementary services                  in February 2012, and the increase in          £17.6m. The final calculation of the
     include the provision of Locus reports,            trade and other receivables is mainly due      deferred consideration is currently in
     witness and quantum statements.                    to the £7.0m increase in the Panacea           progress with the amount payable due
     These services provide support for the             loan book (including deferred interest)        for payment mid-2013. Refer to note
     solicitor as soon as possible after the            representing premium finance loans             11 for further details.
     accident has occurred and include                  which will be repaid over the next 10
     photography and recreating the scene               months. The cash balance has fallen            In relation to the acquisition of eSystems
     of the accident, talking to those involved         primarily as a result of the repayment         Limited a deferred consideration of £1m
     or witnesses to the accident in order to           of external borrowings and is further          is payable on 31 December 2012.
     generate witness statements and quantum            explained on page 10.
     reports, and undertaking road traffic
                                                        The overall movement in liabilities is small
     accident fraud investigations which can
                                                        but within liabilities, £15m of external
     prove or disprove the validity of a claim.
                                                        borrowings has been repaid in the period
     While these additional services are                with borrowings decreasing from £29.5m
     generally low margin products, they can            in December 2011 to £14.5m in June
     be supported by the existing infrastructure        2012 off-set by an increase in insurer and
     of the business and are expected to                broker creditors due to timing differences
     reinforce relationships with existing              and an increase in levels of activity.
     clients, while also making the overall
                                                        At 30 June 2012 the balance sheet
     product offering more appealing to
                                                        included £18.4m of liabilities relating to
     potential new clients.
                                                        deferred consideration payments on the
     The combined result of these activities            acquisition of the eBike and eCar policy
     is that turnover has remained consistent           books and eSystems Limited. In relation
     between the first half of 2012 and the             to eBike and eCar the actual amount of
     same period of 2011.                               deferred consideration payable is calculated
                                                        based upon the profits generated by eCar
     The Government has recently announced              and eBike over the deferred consideration
     its intention to ban the payment of referral       earn out period.
     fees and introducer commissions in
     connection with personal injury claims.
     This ban, which is expected to be
     introduced in April 2013, will encompass
     the services provided by our medical
     reporting agency IQED. Such changes in
     legislation inevitably lead to uncertainty
     as the industry seeks to understand the
     impact of the relevant changes.
     However, any ban on the payment of
     referral fees will not reduce the level of
     genuine personal injury claims or the
     requirement to obtain a medical report to
     support those claims. Therefore we are
     working with both existing referrers and
     potential new referrers of business to
     develop a business model which will
     secure our flow of medical reporting
     referrals post any referral fee ban and
     at this stage we do not anticipate any
     reduction in medical reporting referrals
     as a result of the referral fee ban.




09          Brightside Group plc Interim Results 2012
Cash generation

The Group’s cash balance has fallen from £13.8m at 31 December 2011 to £8.2m at
30 June 2012. Of the cash balance, £5.2m relates to client cash (£3.0m in December 2011).
Therefore cash available for general purposes fell from £10.8m to £2.9m.

The Group’s insurance brokerages and associated businesses continue to be highly cash
generative. Earnings before interest, tax, depreciation and amortization (“EBITDA”) for the
Group in the first half totalled £11.2m; of which online and offline brokers contributed £5.1m,
Panacea contributed £3.4m and medical reporting contributed £1.4m. These funds have
primarily been used to repay £15m of external borrowings.


The other key movements are as per the table below.


                                                                                      £m

 Cash balance at 31 Dec 2011                                                         13.8

 Cash in

 Generation of EBITDA                                                                11.2

 Working capital management                                                           3.2

 Inrease in client cash                                                               2.2

 Cash out

 Repayment of borrowings                                                            (15.0)

 Purchase of MMT Centre                                                              (3.0)

 Tax and interest payments                                                           (3.1)

 Other payments                                                                      (1.1)

 Cash balance at 30 June 2012                                                         8.2




                                                                                                  Brightside Group plc Interim Results 2012   10
     Dividend Policy                                    Share Buy Back                                 The Regulatory Environment
     The Board has stated for some time that            It has become clear that the share price       and Challenges Ahead
     it is committed to the principle of dividend       of the Group is disproportionately             The FSA’s Retail Conduct Risk Outlook
     payments, and that the timing of these             affected by low volumes of shares traded       for 2012 identified three key issues at
     payments would be subject to the                   on the AIM market. An illustration of this     focus, each of these were based around
     availability of cash resources, ongoing            is that in the six month period 20 July        the emerging risk of products being sold
     bank facilities and the level of deferred          2011 to 20 January 2012 the share price        to the detriment of the consumer,
     consideration payments due on recent               moved from 27.00 pence per share to            these being purchases based on the
     acquisitions. The general and premium              13.73 pence per share, a movement of           cheapest price, sales disclosures for
     finance facilities from Clydesdale Bank            -49% on shares traded representing only        add-on products and products of limited
     PLC were successfully renewed in                   3.2% of the total shares in issue.             value. To counter the possibility of tighter
     August 2012 and while further deferred             This arises from the adverse effect of         controls across the industry, the Group
     consideration payments remain outstanding          sales of small numbers of shares over          embarked on a review of its sales
     on the acquisition of the eCar policy book         time. At the same time the marketing of        procedures, pricing structure and
     and the eSystems on line platform, the             the shares to institutions and other           product disclosures to ensure that it
     Board has sufficient cash flow visibility and      investors is often frustrated by the lack      remains fully compliant with conduct of
     headroom to allow for the commencement             of availability of stock in the market.        business rules.
     of dividend payments with a maiden
     dividend payment of 0.22p per ordinary             The Board believes that within                 Early 2013 will see the formal break-up
     share due to be paid in October 2012.              appropriate limits and under the supervision   of the FSA and the transfer of its powers
                                                        of its Nomad, the Group should purchase        from a single regulator to two new bodies
     In line with the London Stock Exchange             small amounts of ordinary shares. Such         – the Financial Conduct Authority (FCA)
     dividend procedure timetable the                   ordinary shares would be held by the           and the Prudential Regulation Authority
     associated dates for the payment of                Company in its own name and would in           (PRA). The Group will be regulated by the
     the dividend will be as follows:                   the future either be sold for cash, used       FCA for both market conduct and the
                                                        to meet the Company’s obligations under        prudential regulation, so avoiding dual
     • Announcement date                                employee share schemes or be cancelled         regulation and its associated costs. It is
       14 September 2012                                at a later date. A resolution to this effect   not envisaged that the FCA will introduce
                                                        will be put to a General Meeting of            sweeping changes, but will concentrate
     • Ex Dividend Date
                                                        shareholders in due course.                    on the current interventionist strategy,
       26 September 2012
                                                                                                       favoured by the FSA, especially in respect
     • Associated Record Date                                                                          of high risk products. A watching brief
       28 September 2012                                                                               is being maintained and the business
                                                                                                       remains well placed to react to any
     • Payment Date                                                                                    changes that are introduced. In addition,
       26 October 2012                                                                                 the sale of high risk products (as defined
                                                                                                       by the FSA) has traditionally been avoided
     Looking forward, the Board expects to                                                             by the Group and there are no plans to
     be able to follow a progressive and                                                               change this approach.
     sustainable dividend policy.




           Looking forward,
     the Board expects
     to be able to follow
     a progressive
     and sustainable
     dividend policy.”

     Martyn Holman
     CEO Brightside Group plc




11          Brightside Group plc Interim Results 2012
Future strategy and trading outlook

The Board views the prospects for the remainder of 2012 and beyond with confidence.

We expect to report growth in H2               In addition, we will continue to explore      Martyn Holman
over H1. Our core broking businesses           sectors and routes to market where
continue to grow in line with expectations,    historically we have not traded or            Chief Executive Officer
while growth in H2 is further supported        currently have a sub scale offering,          Brightside Group plc
by the launch of our new white label           including large commercial and online
partnerships and the increase in the           commercial policies, to ascertain the         14 September 2012
premium finance loan book and                  market size and potential profitability.
associated deferred interest balance at        In following this strategy we will continue
June 2012. We expect to report results         to develop and deploy our technology,
to December 2012 in line with our full         and in particular the Quote Exchange
year forecasts.                                technology acquired in 2011 with the aim
                                               of gaining a market edge to drive down
Our strategy is to continue driving            acquisition cost and improve profitability.
forward in our traditional areas of strength
being broking to the SME and motor             The Board continues to monitor the
sectors (comprising both commercial and        external market place for appropriately
personal lines products) combined with         priced acquisition opportunities which
further focus on improving our processes       would bring increased distribution
to derive better profitability. To support     channels into the Group.
this strategy we continue to work closely
with both existing insurer partners and        Our long term aim is to build an
potential new insurer partners to ensure       ‘outstanding’ major insurance distribution
the Group continues to have both               business. The strong performance in
sufficient and market competitive              the first half is another important step
underwriting capacity.                         in this direction.




                                                                                                                       12
     Consolidated Statement of Comprehensive Income

                                                                                                           Restated             Restated
                                                                              6 months ended 30
                                                                                                       6 months ended 30    12 months ended
                                                                   Note           June 2012
                                                                                                           June 2011       31 December 2011
                                                                                   (unaudited)
                                                                                                            (unaudited)        (audited)

                                                                                      £000’s                   £000’s           £000’s

     Revenue                                                           7              43,550                   39,762           80,396

     Cost of sales                                                                   (13,111)                 (11,486)          (22,475)

     Gross profit                                                                     30,439                   28,276           57,921



     Administrative expenses                                                         (20,896)                 (20,426)          (44,135)

     Other income                                                                        -                        -              1,000

     Operating profit                                                                 9,543                    7,850            14,786



     Finance costs (net)                                               4               (614)                    (662)           (1,177)

     Exceptional Items                                                 5               (760)                      -                -

     Profit before income tax                                          7              8,169                    7,188            13,609



     Income tax expense                                                               (2,532)                  (2,160)          (4,239)

     Profit for the period from continuing operations                                 5,637                    5,028             9,370

     Total comprehensive income for the period                                        5,637                    5,028             9,370

     Attributable to:

     Owners of the parent                                                             5,637                    5,028             9,370



     All activities relate to continuing operations. No other comprehensive income was recognised during the period.



     Basic earnings per share                                          8              1.24p                    1.10p             2.05p

     Diluted earnings per share                                        8              1.24p                    1.09p             2.05p




13         Brightside Group plc Interim Results 2012
Consolidated Balance Sheet

                                                                                                                       As at 31
                                                                   As at 30 June 2012    As at 30 June 2011
                                                            Note                                                    December 2011
                                                                      (unaudited)            (unaudited)
                                                                                                                       (audited)


ASSETS                                                                   £000’s                 £000’s                   £000’s

Non-current assets

Property, plant and equipment                                            4,272                    782                     1,475

Intangible assets                                            9           64,953                 49,081                   65,253

Deferred income tax asset                                                1,824                   1,897                    1,364

Total non-current assets                                                 71,049                 51,760                   68,092



Current assets

Cash and cash equivalents                                                8,178                  15,766                   13,825

Trade and other receivables                                              65,097                 55,665                   55,832

Total current assets                                                     73,275                 71,431                   69,657



TOTAL ASSETS                                                            144,324                 123,191                  137,749



EQUITY AND LIABILITIES

Capital and reserves attributable to owners of the parent

Share capital                                                12          4,563                   4,563                    4,563

Share premium                                                12          28,339                 28,339                   28,339

Reverse acquisition reserve                                              2,530                   2,530                    2,530

Share based payments reserve                                             1,645                   1,341                    1,521

Retained earnings                                                        36,903                 26,924                   31,266

Total equity                                                             73,980                 63,697                   68,219



Non-current liabilities

Deferred consideration                                        11         16,902                 14,832                   15,367

Other provisions                                                           14                      57                      27

Long-term borrowings                                                      235                      84                      146

Total non-current liabilities                                            17,151                 14,973                   15,540



Current liabilities

Current income tax liabilities                                           2,277                   4,186                    3,957

Trade and other payables                                                 34,469                 23,918                   17,693

Deferred consideration                                        11         1,500                   2,402                    2,451

Other provisions                                                          111                     245                      217

Borrowings                                                               14,836                 13,770                   29,672

Total current liabilities                                                53,193                 44,521                   53,990



TOTAL EQUITY AND LIABILITIES                                            144,324                 123,191                  137,749




                                                                                        Brightside Group plc Interim Results 2012   14
     Consolidated Cash Flow Statement

                                                                6 months ended 30   6 months ended 30   12 months ended 31
                                                                    June 2012          June 2011          December 2011
                                                                   (unaudited)         (unaudited)          (audited)


                                                                      £000’s             £000’s               £000’s

     Profit before income tax                                         8,169               7,188               13,609

     Adjustments for:

     Depreciation                                                      286                 148                 376

     Amortisation of intangible assets                                1,551               1,562               3,479

     Profit on disposal of property, plant and equipment                (7)                (15)                (20)

     Release of deferred consideration                                   -                  -                 (1,000)

     Share based payment expense                                       124                 184                 364

     Finance charges - interest                                        441                 258                 491

     Finance charges - unwinding of discount on deferred
                                                                       584                 584                1,168
     consideration

     Operating cash flows before movements in working
                                                                     11,148               9,909               18,467
     capital

     Change in working capital

     Trade and other receivables                                      (9,265)            (12,935)            (15,130)

     Trade and other payables                                        14,654              13,042               8,369

     Cash generated from operations                                  16,537              10,016               11,706

     Interest received                                                  25                  -                   75

     Income tax paid                                                  (2,087)            (1,750)              (3,586)

     Net cash generated from operating activities                    14,475               8,266               8,195



     Cash flows from investing activities

     Payments to acquire property, plant and equipment                (466)               (337)               (1,355)

     Payments to acquire intangible assets                            (1,250)            (3,159)              (1,301)

     Payments to acquire subsidiaries, net of cash acquired           (3,000)               -                (18,700)

     Proceeds from disposal of property, plant and equipment           391                 126                 460

     Net cash used in investing activities                           (4,325)             (3,370)             (20,896)



     Cashflows from financing activities

     Proceeds / (repayments) of borrowings                             253                (111)                (47)

     Borrowings (repaid) / drawn down                                (15,000)             4,100               20,000

     Interest paid                                                    (1,050)             (258)                (566)

     Net cash (used in) / generated from financing activities        (15,797)             3,731               19,387



     Net (decrease) / increase in cash and cash equivalents          (5,647)              8,627               6,686



     Cash and cash equivalents at beginning of period                13,825               7,139               7,139

     Cash and cash equivalents at end of period                       8,178              15,766               13,825




15         Brightside Group plc Interim Results 2012
Statement of Changes in Shareholders’ Equity

                                                         Attributable to the owners of the parent

                                                                                               Share
                                                                               Reverse
                                            Share      Share     Retained                      based
                                                                              acquisition                     Total
                                            capital   premium    earnings                    payments
                                                                               reserve
                                                                                              reserve

                                            £000’s     £000’s      £000’s        £000’s        £000’s         £000’s

Equity as at 1 January 2011                  4,549     27,849      21,896         2,530         1,157        57,981



Comprehensive income

Profit for the period                          -         -          5,028           -              -          5,028

Total comprehensive income for the period      -         -          5,028           -              -          5,028



Transactions with the owners

Issued share capital                          14        490           -             -               -          504

Share based payments reserve                   -         -            -             -            184           184

Total transactions with owners                14        490           -             -            184           688

Equity as at 30 June 2011                    4,563     28,339      26,924         2,530         1,341        63,697



Comprehensive income

Profit for the period                          -         -          4,342           -               -         4,342

Total comprehensive income for the period      -         -          4,342           -               -         4,342



Transactions with the owners

Share based payments reserve                   -         -            -             -            180           180

Total transactions with the owners             -         -            -             -            180           180

Equity as at 31 December 2011                4,563     28,339      31,266         2,530         1,521        68,219



Comprehensive income

Profit for the period                           -        -          5,637           -              -          5,637

Total comprehensive income for the period      -         -          5,637           -              -          5,637



Transactions with the owners

Share based payments reserve                   -         -            -             -            124           124

Total transactions with owners                 -         -            -             -            124           124

Equity as at 30 June 2012                    4,563     28,339      36,903         2,530         1,645        73,980




                                                                       Brightside Group plc Interim Results 2012       16
     Notes to the consolidated financial information

     1. General information                               2. Basis of preparation
     The principal activities of Brightside Group plc     The interim financial information (“Interim      For the 6 months ended 30 June 2011
     (“the Company”) and its subsidiaries (together       Report”) is presented in pounds sterling         (£180,000), and the 12 months ended 31
     “the Group”) are insurance broking, the provi-       and all values are rounded to the nearest        December 2011 (£482,000), there has been
     sion of premium finance , the provision of medi-     thousand pounds (£000) except where              a reclassification from Finance costs (net) to
     cal reports, lead generation and consultancy,        otherwise indicated.                             cost of sales. The reclassification represents
     development and supply of software and web                                                            the interest paid on the Clydesdale facility
     services.                                            As permitted, this Interim Report has been       for Panacea Finance Limited relating to
                                                          prepared in accordance with UK AIM listing       the finance of the loan book. Interest paid
     The company is a public limited liability com-       rules and the recognition and measurement        upon, and bank charges associated with the
     pany, incorporated and domiciled in the United       provisions of IFRS as adopted for use in         premium finance funding facility are considered
     Kingdom, with its shares listed on the Alternative   the EU, not in accordance with IAS 34            to reflect costs of providing the premium
     Investment Market. The address of its registered     “Interim Financial Reporting”.                   finance products to customers. As such these
     office is MMT Centre, Severn Bridge, Aust,                                                            amounts have been reclassified to the Cost of
     Bristol, BS35 4BL.                                   The Interim Report does not include all the
                                                                                                           Sales function category shown on the face of
                                                          information and disclosures required in annual
                                                                                                           the Consolidated Statement of Comprehensive
                                                          financial statements, and should be read in
                                                                                                           Income as this better reflect the function of
                                                          conjunction with the Group’s annual financial
                                                                                                           these costs. Interest expenses are shown
                                                          statements for the year ended
                                                                                                           gross and net of the amounts included within
                                                          31 December 2011.
                                                                                                           Cost of Sales within Note 4 to the accounts.
                                                          The financial information contained in this
                                                                                                           This Interim Report was approved and
                                                          Interim Report does not constitute statutory
                                                                                                           authorised for issue by the Board of Directors
                                                          accounts as defined in section 434 of
                                                                                                           on 13 September 2012.
                                                          Companies Act 2006. The financial
                                                          information contained in this Interim Report
                                                          has not been audited.

                                                          The comparative figures for the year ended 31
                                                          December 2011 have been extracted from the
                                                          2011 annual financial statements, which have
                                                          been prepared in accordance with IFRS, as
                                                          adopted for use in the EU and as applied
                                                          in accordance with the provision of the
                                                          Companies Act 2006. Those accounts which
                                                          have been reported on by the Company’s
                                                          auditor, contained an unqualified audit report
                                                          and did not include any statements under
                                                          section 498 of the Companies Act 2006 and
                                                          were delivered to the Registrar of Companies.

                                                          For consistency with the treatment in the
                                                          current period, balances within the
                                                          comparative figures for the 6 month period
                                                          ended 30 June 2011 and 12 month period
                                                          ended 31 December 2011 have been
                                                          reclassified. For the 6 months ended 30 June
                                                          2011 (£22,000), and 12 months ended 31
                                                          December 2011 (£62,000), there has been a
                                                          reclassification from administrative costs to
                                                          cost of sales. This represents the bank
                                                          charges for operating the Clydesdale facility
                                                          for Panacea Finance Limited.




17           Brightside Group plc Interim Results 2012
3. Summary of significant accounting policies
The principal accounting policies applied in          In 2011 the database of experts and
the preparation of this Interim Report are            relationships with lead providers categorised
consistent with those applied in the 2011             within other intangible assets are stated
annual financial statements and have been             at historical cost less amortisation.
consistently applied to all periods presented         Amortisation is provided at rates calculated
unless otherwise stated.                              to write off the cost, less estimated residual
                                                      value, on a straight-line basis over their useful
(i). Intangible assets                                economic life. The database of experts is
                                                      deemed to have a useful economic life of four
(a) Separately identifiable intangible assets
                                                      years. The relationships with lead providers are
Intangible assets with finite useful lives that       deemed to have a useful economic life of four
are acquired separately are carried at cost           years and one year, depending on whether the
less accumulated amortisation. Amortisation           provider is NewLaw Solicitors or an unrelated
is recognised over their useful economic lives,       third party respectively. As at 31 December
with the charge included in administrative            2011 the intangible asset relating to the
expenses in the Consolidated Statement of             database of experts and relationships with lead
Comprehensive Income.                                 providers was fully amortised. As a result there
                                                      is no amortisation relating to this asset in the
Intangible assets with indefinite useful lives that   period ending 6 months 30 June 2012.
are acquired separately are carried at cost less
accumulated impairment losses.                        The Quote Exchange software intangible is
                                                      stated at historical cost less amortisation.
Computer software, which is not an integral part      Amortisation is provided at rates calculated to
of the related hardware, is stated at historical      write off the cost of the software over its useful
cost less amortisation. Amortisation is provided      economic life on a straight line basis.
at rates calculated to write off the cost, less       The maximum useful economic life of the
estimated residual value, on a straight-line basis    software is estimated to be three years.
over their useful economic life. The current
maximum estimated economic life of these              (b) Goodwill
assets is 3 years.
                                                      All goodwill is deemed to have an infinite useful
The eVan, eCar and eBike policy books                 economic life.
categorised within other intangible assets are
stated at historical cost less amortisation.          Goodwill represents the excess of the cost
Amortisation is provided at rates calculated          of an acquisition over the fair value of the
to write off the cost of the policy books over        Group’s share of the identifiable net assets
their useful economic life. The maximum useful        of the acquired subsidiary/associate at the
economic life of the policy books is estimated        date of acquisition. Goodwill on acquisition of
to be five years, with amortisation being             subsidiaries is included in ‘intangible assets’.
provided on the basis of expected customer            Separately recognised goodwill is tested
renewals each year from the acquired policy           annually for impairment and carried at cost less
books as a percentage of total expected               accumulated impairment losses. Impairment
renewals from the acquired policy books.              losses are charged to administrative
                                                      expenses in the Consolidated Statement of
                                                      Comprehensive Income.




                                                                                                           Brightside Group plc Interim Results 2012   18
      4. Finance Costs

                                                                                                          Restated                     Restated
                                                                         6 months ended 30
                                                                                                      6 months ended 30            12 months ended 31
                                                                             June 2012
                                                                                                          June 2011                  December 2011


                                                                                £000’s                        £000’s                       £000’s

      Bank borrowings                                                            (411)                         (233)                        (492)

      Unwinding of discount on deferred consideration                            (584)                         (584)                       (1,168)

      Other interest expense                                                      (55)                         (25)                          (74)

      Total finance costs                                                       (1,050)                        (842)                       (1,734)



      Other interest received                                                     25                             -                           75

      Net finance costs (including finance cost within cost of sales)           (1,025)                        (842)                       (1,659)



      Bank Interest relating to finance of loan book (included in cost
                                                                                  411                          180                          482
      of sales)

      Net finance costs as per income statement                                  (614)                         (662)                       (1,177)




     5. Exceptional items
     During the period the Group incurred exceptional costs of £520,000 in relation to redundancy payments, and £240,000 of other exceptional costs.




19           Brightside Group plc Interim Results 2012
6. Earnings before interest, tax, depreciation, amortisation, exceptional items and share
based payments charge
                                                                                      Restated                    Restated
                                                              6 months ended 30
                                                                                  6 months ended 30          12 months ended 31
                                                                  June 2012
                                                                                      June 2011                December 2011
                                                                 (unaudited)
                                                                                     (unaudited)                   (audited)

                                                                    £000’s              £000’s                      £000’s

Total comprehensive income for the period                           5,637               5,028                        9,370



Finance costs - Interest (net)                                       30                   78                           9

Bank Interest relating to finance of loan book (included in
                                                                     411                 180                          482
cost of sales)

Total Interest                                                       441                 258                          491

Unwinding of discount on deferred consideration                      584                 584                         1,168

Income tax expense                                                  2,532               2,160                        4,239

Depreciation                                                         286                 148                          376

Amortisation of intangible assets                                   1,551               1,562                        3,479

Other income                                                          -                    -                        (1,000)

Share based payments expense                                         124                 184                          364

EBITDA (before exceptional other income and share based
                                                                   11,155               9,924                       18,487
payments charge)




                                                                                     Brightside Group plc Interim Results 2012    20
     7. Segmental Analysis
     IFRS 8 “Operating Segments” requires                 Whilst the Group operates from a number of
     operating segments to be determined based            different geographical locations these locations
     on the Group’s internal reporting to the chief       all provide services to customers across the
     operating decision maker which is used to            UK irrespective of their geographical location.
     allocate resources to segments and to assess         Therefore it has not been deemed appropriate
     performance. The chief operating decision            to produce a segmental analysis on a
     maker has been identified as the Board of            geographical basis.
     Directors. The Board of Directors review the
     Group’s consolidated management accounts             The operating segments within the Group
     in order to assess the operational performance       primarily trade with customers external to
     of the Group’s operating segments.                   the Group, however the lead generation and
     Monthly management accounts are prepared             premium finance functions also trade with
     for each statutory entity within the Group.          other group companies. Whilst information
     These are subsequently consolidated to               provided within the individual management
     form monthly management accounts for the             accounts is presented on a gross basis,
     combined Group. The information contained            any intra-group trading is excluded from the
     within the consolidated management accounts          consolidated management accounts through
     includes a Statement of Comprehensive                consolidation adjustments. The revenue figures
     Income, Balance Sheet, Cash Flow Statement           reported in this segmental analysis have been
     and other supporting schedules, broken down          prepared showing the gross revenue figure,
     by statutory entity within the Group.                and include a consolidation adjustment which
                                                          removes the effect of intra-group trading.
     To assess the performance of the individual
     operating segments, and for the purpose              Included within intangibles in the segmental
     of strategic decision making, the Board of           analysis are; goodwill, software and the
     Directors will consider a number of different        acquired policy books.
     measures of operational achievement including
     revenue growth, profit after tax, profit before      The “All other segments” section includes
     tax and profit before interest, tax, non-cash        consolidation adjustments, as all revenue in
     expenses and exceptional items.                      operating segments is shown on a gross basis.

     Management considers that the Group
     operates within the following distinct operating
     segments; offline insurance broking, online
     insurance broking, the provision of premium
     finance, the provision of medical reporting,
     lead generation and debt management,
     and software and web services. Assets and
     liabilities are not classified between offline and
     online insurance broking, nor between lead
     generation, debt management, software and
     web services.




21           Brightside Group plc Interim Results 2012
7. Segmental Analysis (continued)


                                                        Offline Insurance Broking                        Online Insurance Broking



                                             6 months          6 months       12 months       6 months          6 months       12 months
                                             ended 30          ended 30        ended 31       ended 30          ended 30        ended 31
                                             June 2012         June 2011      December        June 2012         June 2011      December
                                             (unaudited)      (unaudited)    2011(audited)   (unaudited)       (unaudited)    2011(audited)

                                               £000’s            £000’s         £000’s          £000’s            £000’s          £000’s

Revenue from external customers

Revenue - trading                              14,413            13,290         26,700          14,501            12,993          28,211

Total revenue from external customers          14,413            13,290         26,700          14,501            12,993          28,211

Intercompany trading elimination Marketing
and Facility recharge function

Total revenue                                  14,413            13,290         26,700          14,501            12,993          28,211

Operating income                                1,814             1,664             3,127        3,260            2,941             5,887



Release of deferred consideration                 -                 -                 -            -                 -                -

Share based payments expense                     (84)             (120)             (235)         (18)             (27)             (54)

Depreciation                                    (118)              (89)             (233)         (73)             (19)             (56)

Amortisation of intangible assets               (131)             (128)             (289)        (456)             (892)          (1,858)

Net financing costs                              (48)              64                65          (624)             (602)          (1,186)

Profit / (loss) for period before tax           1,433             1,391             2,435        2,089            1,401             2,733



Segment assets                                  6,178            13,750         10,786             -                 -                -

Property, plant and equipment                   3,360              553              1,253          -                 -                -

Intangibles                                    35,020            36,059         35,412             -                 -                -

Total assets excluding tax                     44,558            50,362         47,451             -                 -                -

Total liabilities excluding tax                13,597            22,538         21,784             -                 -                -




                                                                                             Brightside Group plc Interim Results 2012        22
     7. Segmental Analysis (continued)


                                                                     Finance Provider                             Medical Reporting



                                                       6 months        6 months      12 months      6 months         6 months      12 months
                                                       ended 30        ended 30       ended 31      ended 30         ended 30       ended 31
                                                       June 2012       June 2011     December       June 2012        June 2011     December
                                                       (unaudited)    (unaudited)   2011(audited)   (unaudited)     (unaudited)   2011(audited)

                                                         £000’s           £000’s        £000’s         £000’s          £000’s         £000’s

     Revenue from external customers

     Revenue - trading                                    8,544           6,650         15,470          5,822           5,867         11,328

     Total revenue from external customers                8,544           6,650         15,470          5,822           5,867         11,328

     Intercompany trading elimination Marketing and
     Facility recharge function

     Total revenue                                        8,544           6,650         15,470          5,822           5,867         11,328

     Operating income                                     3,407           3,337         6,934           1,350           1,463         2,263

     Release of deferred consideration                      -                -             -              -               -              -

     Share based payments expense                          (14)            (20)          (40)            (8)             (13)          (27)

     Depreciation                                          (13)             (9)          (18)           (10)             (4)           (11)

     Amortisation of intangible assets                     (40)            (74)          (123)          (15)             (7)           (24)

     Net financing costs                                  (305)            (281)         (563)          (24)             (22)          (21)

     Profit / (loss) for period before tax                3,035           2,953         6,190           1,293           1,417         2,180



     Segment assets                                      50,263           43,394        34,271         12,122           9,544         11,718

     Property, plant and equipment                         128              24            11            139              23             25

     Intangibles                                           55              121            70            5,268           5,316         5,228

     Total assets excluding tax                          50,446           43,539        34,352         17,529          14,883         16,971

     Total liabilities excluding tax                     26,839           27,520        32,164          2,192           2,142         2,215




23         Brightside Group plc Interim Results 2012
7. Segmental Analysis (continued)


                                                   Lead Generation and debt management              Software and web services




                                                                              12 months                                     12 months
                                                  6 months      6 months                   6 months         6 months
                                                                               ended 31                                      ended 31
                                                  ended 30      ended 30                   ended 30         ended 30
                                                                              December                                      December
                                                  June 2012     June 2011                  June 2012        June 2011
                                                                                 2011                                          2011
                                                  (unaudited)   (unaudited)               (unaudited)      (unaudited)
                                                                              (audited)                                      (audited)

                                                    £000’s        £000’s        £000’s       £000’s           £000’s           £000’s

Revenue from external customers

Revenue - trading                                    2,337         3,078        6,607         3,027             438              972

Total revenue from external customers                2,337         3,078        6,607         3,027             438              972

Intercompany trading elimination Marketing
and Facility recharge function

Total revenue                                        2,337         3,078        6,607         3,027             438              972

Operating income                                      381           347          758           943              172              518

Fair value adjustment for deferred onsideration        -             -            -             -                -                -

Share based payments expense                           -            (4)          (8)            -                -                -

Depreciation                                          (25)          (23)         (51)          (47)             (4)              (7)

Amortisation of intangible assets                     (40)          (65)        (128)         (358)               -             (203)

Net financing costs                                   (2)           (1)          (1)           (22)              -               47

Profit / (loss) for period before tax                 314           254          570           516              168              355



Segment assets                                       4,712         4,743        12,882          -                -                -

Property, plant and equipment                         645           182          186            -                -                -

Intangibles                                         24,610         7,585        24,543          -                -                -

Total assets excluding tax                          29,967        12,510        37,611          -                -                -

Total liabilities excluding tax                     25,439         3,108        9,410           -                -                -




                                                                                          Brightside Group plc Interim Results 2012      24
     7. Segmental Analysis (continued)


                                                                     All other segments                               Consolidated




                                                                                          12 months                                  12 months
                                                       6 months          6 months                       6 months      6 months
                                                                                           ended 31                                   ended 31
                                                       ended 30          ended 30                       ended 30      ended 30
                                                                                          December                                   December
                                                       June 2012         June 2011                      June 2012     June 2011
                                                                                             2011                                       2011
                                                       (unaudited)      (unaudited)                     (unaudited)   (unaudited)
                                                                                          (unaudited)                                (audited)

                                                         £000’s            £000’s           £000’s        £000’s         £000’s        £000’s

     Revenue from external customers

     Revenue - trading                                      -                 -                -          48,644         42,316        89,288

     Total revenue from external customers                  -                 -                -          48,644         42,316        89,288

     Intercompany trading elimination                    (5,358)           (2,938)          (9,139)       (5,358)        (2,938)       (9,139)

     Marketing and Facility recharge function              264              384               247           264           384           247

     Total revenue                                       (5,094)           (2,554)          (8,892)       43,550         39,762        80,396

     Operating income                                       -                 -             (1,000)       11,155         9,924         18,487

     Fair value adjustment for deferred onsideration        -                 -              1,000           -              -          1,000

     Share based payments expense                           -                 -                -           (124)          (184)        (364)

     Depreciation                                           -                 -                -           (286)          (148)        (2,376)

     Amortisation of intangible assets                    (511)             (396)            (854)        (1,551)        (1,562)       (3,479)

     Net financing costs                                    -                 -                -          (1,025)         (842)        (1,659)

     Profit / (loss) for period before tax                (511)             (396)            (854)         8,169         7,188         13,609



     Segment assets                                         -                 -                -          73,275         71,431        69,657

     Property, plant and equipment                          -                 -                -           4,272          782          1,475

     Intangibles                                            -                 -                -          64,953         49,081        65,253

     Total assets excluding tax                             -                 -                -          142,500       121,294       136,385

     Total liabilities excluding tax                        -                 -                -          68,067         55,308        65,573




25          Brightside Group plc Interim Results 2012
 8. Earning per share

                                                                   6 months ended 30            6 months ended 30            12 months ended 31
                                                                       June 2012                    June 2011                  December 2011
                                                                        (unaudited)                  (unaudited)                  (audited)


                                                                           £000’s                       £000’s                       £000’s

 Profit for the period attributable to the equity shareholders             5,637                        5,028                         9,370



                                                                         (Number)                     (Number)                     (Number)

 Weighted average number of ordinary shares in issue
 (basic & diluted)

 Issued ordinary shares at 1 January                                    456,274,109                  454,879,409                  454,879,409



 Effect of shares issued on 8 February 2011                                   -                       1,101,890                    1,249,498



 Basic

 Weighted average number of ordinary shares at

 30 June / 31 December                                                  456,274,109                  455,981,299                  456,128,907



 Effect of share options on weighted average                                  -                       4,194,381                     663,540



 Diluted

 Weighted average number of ordinary shares at                          456,274,109                  460,175,680                  456,792,447

 30 June / 31 December



 Basic earnings per share                                                  1.24p                        1.10p                         2.05p



 Diluted earnings per share                                                1.24p                        1.09p                         2.05p




Basic earnings per share is calculated by dividing the profit for the period attributable to equity shareholders by the weighted average number of
ordinary shares in issue during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
potential dilutive ordinary shares.

In accordance with IAS 33 “Earnings per Share” paragraph 47 there are no dilutive effects on the earnings per share calculations as at 30 June
2012, as the average market price of ordinary shares in Brightside Group plc is below the exercise price of the outstanding share options granted.




                                                                                                    Brightside Group plc Interim Results 2012        26
     9. Intangible assets

                                                                                    Computer
                                                                         Other
                                                         Goodwill                   Software &      AICC           Total
     As at 30 June 2012                                               Intangibles
                                                        (unaudited)                  Licences     (unaudited)   (unaudited)
                                                                      (unaudited)
                                                                                    (unaudited)

                                                          £000’s        £000’s        £000’s        £000’s        £000’s

     Cost

     Opening balance as at 1 January 2012                 45,621        15,260        14,693         2,963        78,497

     Additions                                               -             -            287           964          1,251

     Disposals                                               -             -             -             -             -

     Balance as at 30 June 2012                           45,621        15,260        14,940         3,927        79,748



     Amortisation and impairment losses

     Opening balance as at 1 January 2012                 (1,886)       (7,929)       (3,429)          -          (13,244)

     Amortisation                                            -           (793)         (758)           -          (1,551)

     Disposals                                               -             -             -             -             -

     Balance as at 30 June 2012                           (1,886)       (8,722)       (4,187)          -          (14,795)



     Net Book Value

     At 31 December 2011                                  43,735         7,331        11,224         2,963        65,253

     At 30 June 2012                                      43,735         6,538        10,753         3,927        64,953




27          Brightside Group plc Interim Results 2012
9. Intangible assets (continued)

                                                               Restated
                                   Restated        Other       Computer
                                                                                       AICC                  Total
As at 30 June 2011                 Goodwill     Intangibles   Software &
                                                                                   (unaudited)           (unaudited)
                                  (unaudited)   (unaudited)    Licences
                                                              (unaudited)

                                    £000’s        £000’s        £000’s                 £000’s                £000’s
Cost

Opening balance as at 1 January
                                    43,738         8,272         3,923                    -                  55,933
2011

Additions                            1,691           -           2,915                    -                  4,606

Disposals                              -             -            (66)                    -                   (66)

Balance as at 30 June 2011          45,429         8,272         6,772                    -                  60,473

Amortisation and impairment
losses

Opening balance as at 1 January
                                    (1,886)       (5,388)       (2,558)                   -                  (9,832)
2011

Amortisation                           -           (934)         (628)                    -                  (1,562)

Disposals                              -             -             2                      -                    2

Balance as at 30 June 2011          (1,886)       (6,322)       (3,184)                   -                 (11,392)

Net Book Value

At 31 December 2010                 41,852         2,884         1,365                    -                  46,101

At 30 June 2011                     43,543         1,950         3,588                    -                  49,081




                                                                          Brightside Group plc Interim Results 2012    28
     9. Intangible assets (continued)

                                                                                Computer
                                                           Other Intangibles                   AICC         Total
                                               Goodwill                        Software and
     As at 31 December 2011
                                               (audited)                         Licences     (audited)   (audited)
                                                               (audited)
                                                                                 (audited)


                                                 £000’s         £000’s            £000’s       £000’s      £000’s
     Cost

     Opening balance as at 1 January
                                                 43,738          8,272            3,923           -        55,933
     2011

     Additions                                      -              -              1,301           -         1,301

     Additions on acqusitions                     1,883          6,988            9,722         2,963      21,556

     Disposals                                      -              -               (293)          -         (293)

     Balance as at 31 December
                                                 45,621         15,260            14,653        2,963      78,497
     2011




     Amortisation and impairment
     losses

     Opening balance as at 1 January
                                                 (1,886)        (5,388)           (2,558)         -        (9,832)
     2011

     Amortisation                                   -           (2,541)            (938)          -        (3,479)

     Disposals                                      -              -                67            -          67

     Balance as at 31 December
                                                 (1,886)        (7,929)           (3,429)         -       (13,244)
     2011



     Net Book Value

     At 31 December 2010                         41,852          2,884            1,365           -        46,101

     At 31 December 2011                         43,735          7,331            11,224        2,963      65,253




29          Brightside Group plc Interim Results 2012
10. Intangible asset additions
The intangible asset additions in the 6 month period to 30 June 2012 relate to the following



                                                                       Goodwill                Intangibles assets
                                                                                                                           Total (unaudited)
                                                                      (unaudited)                 (unaudited)


                                                                         £000’s                      £000’s                      £000’s

Computer software and licenses

Software Platform                                                           -                         287                          287



AICC

Assets in course of construction within E Systems Limited                   -                         964                          964



Total                                                                       -                        1,251                        1,251




                                                                                                  Brightside Group plc Interim Results 2012    30
      10. Intangible asset additions (continued)
      The intangible asset additions in the 6 month period to 30 June 2011 relate to the following


                                                                                                               Restated
                                                                           Restated Goodwill
                                                                                                          Intangibles assets             Total (unaudited)
                                                                              (unaudited)
                                                                                                              (unaudited)


                                                                                   £000’s                        £000’s                         £000’s

      Acquisition of Intangibles

      Acquisition of Quote Exchange Limited business                                1,691                            -                          1,691

      Aggregator software acquired on purchase of Quote
                                                                                       -                          2,169                         2,169
      Exchange



      Computer software and licenses                                                  -                            287                           287

      Net book value of software platform acquired on acquisition
                                                                                      -                            459                           459
      of Quote Exchange Limited

      Software Platform

      Total                                                                         1,691                         2,915                         4,606




     The 2011 interims analysis has been restated to reflect the final fair values attributed. £287,000 was reclassified from goodwill to intangible assets.




31            Brightside Group plc Interim Results 2012
10. Intangible asset additions (continued)
The intangible asset additions in the 6 month period to 31 December 2011 relate to the following



                                                                      Goodwill               Intangibles assets
                                                                                                                            Total (unaudited)
                                                                     (unaudited)                   (unaudited)


                                                                       £000’s                         £000’s                      £000’s

Acquisition of Intangibles

Adjustment to acquisition value of Quote Exchange Limited
                                                                         (30)                            -                          (30)
business

Acquisition of the online insurance broking system                        -                           4,819                        4,819

Acquisition of the Edevelopment business                                 222                             -                          222



Computer software and licenses

NBV of software platform acquired on acquisition of
                                                                          -                            126                          126
Edevelopment Ltd

CPR system on acquisition of Esystems Limited                              -                          2,000                        2,000

NBV of capitalised development costs acquired with E
                                                                          -                           7,309                        7,309
Systems Limited

Software Platform                                                         -                            842                          842



AICC

AICC acquired with E Systems Limited                                      -                           2,883                        2,883

AICC acquired with E Development Limited                                  -                             80                           80



Total                                                                    192                          18,059                      18,251




                                                                                                   Brightside Group plc Interim Results 2012    32
      11. Deferred Consideration Movement


                                                                                                           Quote
                                                                          eCar             eBike                            Esystems            Total
                                                                                                          Exchange



                                                                          £000’s           £000’s            £000’s           £000’s            £000’s

      As at 1 January 2011 (audited)                                      14,296            1,354               -                -             15,650

      Unwinding of discount on deferred consideration                      538               46                 -                -               584

      Deferred consideration on acquisition of Quote Exchange                -                -              1,000               -              1,000

      As at 30 June 2011 (unaudited)                                      14,834            1,400            1,000               -             17,234



      Unwinding of discount on deferred consideration                      538               46                 -                -               584

      Deferred consideration on acquisition of Esystems                      -                -                 -              1,000            1,000

      Release of deferred consideration for Quote Exchange                   -                -              (1,000)             -              (1,000)

      As at 31 Dec 2011 (audited)                                         15,372            1,446               -              1,000           17,818



      Unwinding of discount on deferred consideration                      538               46                 -                -               584

      As at 30 June 2012 (unaudited)                                      15,910            1,492               -              1,000           18,402



     The discounted eCar deferred consideration payable that is included in the non-current liabilities at 30 June 2012 represents management’s best
     estimate of the current fair value of the amount payable. Now the basis period has concluded, the calculation will be subject to further review and
     final agreement by both parties.




33           Brightside Group plc Interim Results 2012
 12. Share Capital / Premium


 Share Movements                                     Share Capital   Share Premium            Number of Shares



                                                        £000’s           £000’s                       000’s

 At 31 December 2010 (audited)                           4,549           27,849                      454,879

 Shares issued February 2011                              14              490                         1,395

 At 30 June 2011 (unaudited)                             4,563           28,339                      456,274

 At 31 December 2011 (audited)                           4,563           28,339                      456,274

  At 30 June 2012 (unaudited)                            4,563           28,339                      456,274



13. Post Balance Sheet Events
i) Premium Finance Funding Facility

The Group renewed a £15m revolving loan
facility provided by Clydesdale Bank in August
2012. The company utilises two revolving loan
facilities of £15m each, one expiring in August
2013, the other expiring in August 2014.
The Group utilises this facility to finance the
premium finance loans. At the interim balance
sheet date the company had drawn down
£14.5m, with a further £15.5m available.

ii) £1m Interim Dividend

The Group announced an interim dividend
of 0.22p per share on 14 September 2012.
This represents an interim dividend for the
12 month period ending 31 December
2012. The dividend is expected to be paid
to shareholders in mid-October. At the date
of the announcement there are 456,274,109
ordinary shares in issue and the total value of
the interim dividend of 0.22p is £1m.

iii) Partnerships with ASDA Money
and Debenhams

The Group announced partnerships with ASDA
Money and Debenhams in July 2012. The
Group will manage ASDA Money car and home
insurance offering, and Debenhams branded car
insurance products. Both partnerships will see
the Group offer fully serviced branded insurance
products which are available online, or via our UK
based call centres.




                                                                      Brightside Group plc Interim Results 2012   34
     Forward-looking statements

     This report contains certain forward-looking           factors. Important factors that could cause
     statements which may include reference to              actual results to differ materially from estimates
     one or more of the following in relation to            or projections contained in the forward-looking
     the Group: its financial condition, results of         statements include without limitation: economic
     operations, cash flows, dividends, financing           and business cycles, the terms and conditions of
     plans, business strategies, operating                  the Group’s financing arrangements, competition
     efficiencies or synergies, budgets, capital and        in the Group’s principal markets, acquisitions or
     other expenditures, competitive positions,             disposals of businesses or assets and trends in
     growth opportunities for existing products,            the Group’s principal industries.
     plans and objectives of management and
     other matters.                                         The foregoing list of important factors is not
                                                            exhaustive. When relying on forward-looking
     Statements in this report that are not historical      statements, careful consideration should
     facts are hereby identified as “forward-looking        be given to the foregoing factors and other
     statements”. Such forward-looking statements,          uncertainties and events, as well as factors
     including, without limitation, those relating to the   described in documents the Company files
     future business prospects, revenue, working            with the UK regulator from time to time
     capital, liquidity, capital needs, interest costs      including its annual reports and accounts.
     and income, in each case relating to the Group,
     wherever they occur in this report, are necessarily    Such forward-looking statements speak only
     based on assumptions reflecting the views of           as of the date on which they are made. Except
     the Board of Directors and Management and              as required by the AIM rules for Companies
     involve a number of known and unknown risks,           and applicable law, the Group undertakes
     uncertainties and other factors that could cause       no obligation to update publicly or revise any
     actual results, performance or achievements            forward-looking statements, whether as a
     to differ materially from those expressed or           result of new information, future events or
     implied by the forward-looking statements. Such        otherwise. In light of these risks, uncertainties
     forward-looking statements should, therefore,          and assumptions, the forward looking events
     be considered in light of various important            discussed in this report might not occur.




     Copies of the Interim Report

     Copies of the Interim Report will be available to
     shareholders via the Group’s website
     www.brightsidegroup.co.uk




35
Shareholder Notes




                    Brightside Group plc Interim Results 2012   36
     Shareholder Notes




37      Brightside Group plc Interim Results 2012
Corporate Directory

Company Secretary and Registered Office
                                               David Herrmann
                                               MMT Centre
                                               Severn Bridge
                                               Aust
                                               Bristol BS35 4BL
                                               01454 636855


Auditor
                                               Baker Tilly UK Audit LLP*
                                               Hartwell House
                                               55-61 Victoria Street
                                               Bristol BS1 6AD
                                               *Registered to carry out audit work by Institute of
                                               Chartered Accountants in Scotland


Financial PR Adviser
                                               Yellow Jersey PR Limited
                                               South Building, Upper Farm,
                                               Wootton St. Lawrence, Basingstoke,
                                               Hants RG23 8PE


Solicitors
                                               Manches LLP
                                               Aldwych House
                                               81 Aldwych
                                               London WC2B 4RP


Nominated Adviser and Joint Corporate Broker
                                               Cenkos Securities plc
                                               6.7.8 Tokenhouse Yard
                                               London EC2R 7AS


Joint Corporate Broker
                                               finn Cap
                                               60 New Broad Street
                                               London EC2M 1JJ




                                                                                    Brightside Group plc Interim Results 2012   38
Brightside Group plc
MMT Centre, Severn Bridge,
Aust, Bristol, BS35 4BL
Telephone: 01454 635860
www.brightsidegroup.co.uk
info@brightsidegroup.co.uk

				
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