Impact Holdings swings to loss amid legal battle

Specialist lender Impact Holdings announced preliminary results for the year to 31 March on Friday, swinging to a loss of £0.23m, against last year’s £0.25m profit, amid a legal battle in which it has stopped recognising revenue.

The AIM-traded firm said this equates to a loss per share of 8.6p, down from a profit of 10p per share in the year to 31 March 2015.

Impact claimed to have further reduced its exposure to external debt providers during the year, and reported cash and cash equivalents of £0.3m at year-end, compared with £1.6m.

It had net assets of £5.6m on 31 March, marginally lower than the £5.8m it reported in 2015.

“These results reflect the ongoing complex and long running litigation we are engaged in,” said non-executive chairman Roger Barlow.

“We continue to de-risk the business and reduce our exposure to external debt providers.”

Impact Holdings had previously announced that the recognition of revenue, usually generated from loans to clients of solicitor firms, has been suspended pending the outcome of a hearing in the Supreme Court.

The hearing took place on Thursday, with the company’s directors and their legal team remaining confident that the Appeal Court decision handed down in February last year will be upheld.

Such a result would lead to further recoveries from a number of professional indemnity insurers of solicitor firms, which have defaulted on loans advanced.