annual report to shareholders released

News has been released to the market at 6:67PM (26-09-2008):
Annual Report to Shareholders (106 Pages)

The Introductory Remarks follow:-
Repcol’s Quality Management System for debt collection inclusive of litigation support, loss recovery, repossession, process serving and insurance investigation was re-accredited by SAI Global. This accreditation is very important for securing new work under the WA State Government Common Use Arrangement Panel for debt recovery services, and other new business.

The Company migrated to a single web enabled collection system for all major clients. Staffing levels were also increased to handle new business.

Business development work for debt collection business is actively underway now that capacity to handle additional work is available.

The Company received an income tax refund during the year of approximately $5.2 million due to the refund of tax paid in prior years.

This was because Repcol’s forecast collections from its purchase debt ledgers were previously overestimated (with the benefit of hindsight) and the tax amortisation claimed on the ledgers was lower than required.

Following the capital raising and the receipt of this tax refund, Repcol is now on a sure financial footing and, in conjunction with the ongoing initiatives to grow and enhance the agency debt collection business mentioned above, is now actively seeking appropriate additional investment opportunities away from the debt collection business. To assist with this process, Mr Jamie Cullen was appointed to the role of full time Executive Director in August 2008.

Whilst the Board has a very open mind to potential new acquisitions, it is unlikely to consider businesses with less than $5.0 million pre-tax profit or with limited expansion (national or international) potential.

Whilst some opportunities have been identified and are being considered, no detailed due diligence has been undertaken at this stage.

Following is an Abstract from the 'Commentry on the Financial Results'

Revenue from continuing operations of $5.7 million was 2.5% above the prior year’s revenue of $5.5 million. It comprised Australian agency income of $3.1 million and agency income of $2.6 million from Transpacific.

Australian agency income was 5.4% lower than the previous year primarily due to the closure of Repcol’s Brisbane office in January 2007 and delays in commencing new contracts.

Other income, including income from non-operating activities, amounted to $1.6 million compared to $765k, an increase of 114.6%. Other income in the current year included interest of $1.1 million received from the Australian Tax Office for tax refunds relating to prior years.

Following the sale of Byond Global during the year, costs have declined compared to the previous year. Administration costs have declined by 53.2%, down from $385k in the previous year to $180k. Collection costs have decreased by 66.3%, down from $1.2 million in the previous year to $418k.

Depreciation and amortisation expense decreased from $549k to $51k due to the write-down of assets in the previous year and sale of assets in the current year.

As a result of the sale of the debt ledgers in 2007, there was no fair value adjustment to purchased debt ledgers in 2008.

Finance costs of $297k were $2.7 million lower than in the previous year primarily due to the repayment of all major borrowings during the year and lower fees and charges.

Following the sale of Repcol’s interest in Transpacific and Byond Global, the Company continued to provide debt collection services to Transpacific via Repcol (WA) Pty Ltd which engaged Byond Global to collect debts on its behalf.


Fees received by Repcol for this work are included as commission income while the fees paid to Byond Global of $1.1 million are included as third party debt collection costs.

The full report can be viewed by visiting the ASX or Repcol's websites.

Robert