Final Results
Pathfinder Properties PLC
30 June 2003
Pathfinder Properties PLC
Results for the year ended 31 December 2002
The Board of Pathfinder announces the results of the Company for the year ended
31 December 2002, which are set out below. The audited financial statements for
the year ended 31 December 2002 are being sent to all shareholders and are
available for inspection on the Company's website (www.pathfinderplc.com).
Copies may also be obtained from the Company by writing to Pathfinder Properties
PLC, Capital House, Michael Road, London SW6 2YH or from the FT Free Annual
Reports Services, details of which can be found in the Financial Times.
CHAIRMAN'S STATEMENT
The year under review
I am able to report that during 2002, despite a number of unforeseen
distractions, the Group had considerable success in achieving its principal
objectives. The issues that faced your Group on entering 2002 were in terms of
corporate restructuring, litigation, cash requirements and the rationalisation
and progression of your development portfolio.
By the autumn of 2002 we were successful in completing the first key stage in
our strategy for unlocking and improving shareholder value. This was achieved
through the resolution, on sound commercial terms, of the litigation with
Pathfinder Recovery 2 PLC and achieving the sale of Merchant Village to
Selfridges for £15.3 million which significantly improved the cash balances and
gearing.
During the year we have achieved planning on the second phase of River Quarter,
Manchester, and have assembled an important site at North Gate, Newark. Our deal
with Selfridges won an award at the Property Week Scottish Property Awards. All
this adds strength to the Group in moving forward with the rationalisation and
delivery of its development portfolio.
It was therefore a disappointment that in November 2002, an unsought bid was
made for a material stake in your Company. Shareholders will be aware that this
offer, which at 12p per share significantly undervalued your Company, was only
accepted by a small minority of shareholders. However, on the back of this and
other share purchases the bidder, Sunnyview Limited, called an extraordinary
general meeting of the Company in order to remove a majority of your Board
members and replace them with its nominees with a view to the liquidation or
sale of your Group.
The motions at the EGM, held in March 2003, were defeated but the action has
undoubtedly set us back in the timetable. Not only did it cost time and money,
it also created an uncertainty that was detrimental to financing and development
deals we were putting in place. However, in line with my undertaking at the EGM,
we have held constructive discussions with Sunnyview resulting in it being
offered Board representation, as outlined below. We hope now that we can once
again devote our full attention to the ongoing affairs of your Group.
Results and dividend
The Group's pre-tax losses for the year were reduced to £112,000 from a loss of
£1,271,000 for the previous year on turnover of £17.5 million and £4.6 million
respectively. This was after taking into account significant extra holding
costs, including unforeseen building collapses associated with Merchant Village,
and the heavy interest burden your Group was carrying. The loss per share was
0.13p (2001 loss-1.30p). Net assets per share were marginally ahead at 18.76p
(2001-18.56p) and the Group's debt ratio was reduced to 0.15:1 (2001-0.72:1).
Further details of these results are contained in the Operating and Financial
Review.
The Board was very aware that Group administration costs were high. To an extent
this has been due to exceptional matters such as the take-overs and litigation
and in particular the additional legal and senior staff costs involved in these.
Core overhead costs were addressed during the second half of the year and are
now at a level commensurate with a group of our size. Much of the core costs
relate to the salaries of key staff who are essential to the realisation of
future profits from the business. Nonetheless, we continue to monitor this
situation and our requirements.
Although the results for the year have not produced a net profit, we have
confidence in the future and believe that we should also reward shareholders for
their continued support. The Board is therefore proposing the payment of a
dividend for the year and recommend a dividend of 0.25 pence per share (2001-
0.15 pence per share), amounting to £173,000. If approved the dividend will be
paid on 16 September 2003 to shareholders on the register at 8 August 2003.
Your Board
As reported in last year's Chairman's Statement, I joined your Board as Chairman
on the retirement of Sir Christopher Leaver on 25 March 2002 and Claire O'Connor
was appointed as a non-executive director in February 2002. In April 2002, Simon
Dawkins resigned as executive director having lost the confidence of your Board.
In order to lead the Group through this difficult time it has been appropriate
for us to capitalise on the experience, skills and specialisms of your
non-executive directors. I am very grateful to both Claire O'Connor and Marc
Green for their commitment and efforts in the delivery of our strategy by acting
in an executive capacity during this period, together with Malcolm Bacchus our
Finance Director.
Mr Edward Azouz, Chairman and Chief Executive of Sunnyview Limited, has accepted
an offer to join the Board in a non-executive capacity and is standing for
appointment at the annual general meeting. We believe it is appropriate our
major shareholder should work with your Board in this manner.
The Board is continuing to review the Group's executive management needs and
requirements to deliver our strategy to shareholders. Meanwhile I am pleased to
announce that two key members of the team, Duncan Austin and Justin Thomas, have
accepted the role of property directors on our appropriate subsidiary company
boards.
Finally, I would like to take this opportunity to thank Marc Green for all his
efforts and his contribution over the years, as he is retiring from the Board at
the AGM. We wish him all the best in the future.
The future
As indicated in the letter to shareholders on 28 February 2003, an exciting
point has been reached in your Group's development. Significant progress is now
being made at both River Quarter, Manchester, and North Gate, Newark, to provide
future profits.
The Group has received offers of finance for the development of Phase 1 at River
Quarter and is currently in advanced negotiations with selected partners. At
Newark, we have agreed the principles of a development, for which we have
received an offer of funding, together with a partial site sale.
We have every confidence in the realisation of our development proposals. In the
intervening time we continue to expense certain overhead and interest costs. As
a result of this policy and of the development time-scale of existing projects,
our profits will continue to be lumpy. We are therefore also actively seeking
smaller development or trading opportunities, with shorter time-frames,
utilising some of the cash released from the sale of Merchant Village. With this
in mind, we are hoping to exchange conditional contracts to acquire a site of
this type in Yorkshire in the near future. The planned project would provide
both residential and retail accommodation on a 1.25 acre site and would be
expected to be completed within two years.
Finally I would like to take this opportunity to thank my colleagues on the
Board of Directors and all our staff for the hard work they have put in during a
particularly trying period. Bearing in mind the personal uncertainties that have
arisen understandably it has not been easy for them, but I hope now that we can
move forward in a way that shareholders can benefit from the efforts that have
been made.
I look forward to reporting to you on further progress in the near future.
John Parry
Chairman
27 June 2003
OPERATING AND FINANCIAL REVIEW
Corporate overview
The financial statements for the year reflect two significant events in addition
to ongoing activities of the Group. First, in May 2002 we reached agreement with
Pathfinder Recovery 2 PLC on the long running dispute between the companies over
their attempts to seek an early dissolution of our joint ventures. Second, in
September 2002, the Group sold its site at Merchant Village, Glasgow to
Selfridges PLC for £15.3 million.
The effects of the agreement with Pathfinder Recovery 2 PLC are set out in
detail in the financial statements but, in summary, involved:
- the acquisition by the Group of the outstanding 50% interest in Pathfinder
Recovery Ventures Limited, previously owned by Pathfinder Recovery 2 PLC;
- the acquisition by the Group of Pathfinder Recovery 2 PLC's 15% interests
in the Merchant Village, Glasgow, and River Quarter, Manchester, developments,
and
- the disposal by Pathfinder Recovery Ventures Limited of its interest in
the site at Tib Street, Manchester.
This agreement substantially completed the consolidation of the Group's assets
bringing the Group's interest in its ventures at Merchant Village and River
Quarter up to 80% ownership, bringing the development at Loch Lomond under the
Group's control and, ultimately, allowing the sale of Merchant Village to
proceed.
During the last two years, particularly through the period of the abortive
Pathfinder Recovery 2 PLC take-over and the ensuing legal battle, it became
clear to the Group that it could no longer count on the support of its previous
joint venture partners to finance the large scale developments proposed at
Merchant Village and River Quarter.
Although the River Quarter development could be phased and so reduce overall
funding requirements, it was not possible to achieve a similar scheme at
Merchant Village. Furthermore, the unexpected rapid deterioration of certain
buildings on the site put a heavy demand on the Group's resources. The Board
therefore looked at alternatives and was pleased to announce in September 2002
the successful conclusion to negotiations with Selfridges PLC for the sale of
the whole site.
This sale not only released the Group from further large cash commitments to
maintain the site, but also provided the necessary cash to continue the
restructuring of the Group and repay borrowings, placing the Group in a
considerably stronger position to move forward.
Results
The results for the year reflect the consolidation of various Pathfinder
interests which have taken place. The acquisition of Pathfinder Recovery
Ventures Limited on 27 May 2002 resulted in the consolidation of the full
results of that company and of Pathfinder (Loch Lomond) Limited, which holds
Lomond Galleries, from that date. Previously, Pathfinder Recovery Ventures
Limited and Pathfinder (Loch Lomond) Limited had been treated respectively as
50% and 75% owned joint ventures, the results of which were included in the
heading 'share of operating profits in joint ventures' rather than as part of
gross profit and administrative expenses.
The comparative period's results include those of Pathfinder Recovery 1 Limited
only from the date of its acquisition in June 2001. At that date the Group's
interests in Pathfinder (River Quay) Limited and Pathfinder (Scotland) Limited,
the holding companies for the developments at River Quarter, Manchester, and
Merchant Village, Glasgow, were increased to 65% and those companies were also
consolidated as subsidiaries for the first time, having previously been 50%
owned joint ventures.
Group turnover for the year arises principally from the sale of Merchant Village
which, together with the disposal of the Group's 50% share in Tib Street,
Manchester, gives total turnover for the year of £17,490,000 compared with
£4,612,000 in 2001. Profits on the sale of Tib Street are reported as part of '
share of operating profits in joint ventures' of £352,000 and not in gross
profit. Gross profit of £1,410,000 (2001-£105,000) represents those profits from
development and trading sales in subsidiaries and a small contribution from net
rental income from the residual BES investment portfolio.
Administrative expenses during the year amounted to £1,451,000 compared with
£1,803,000 in 2001. As in 2001 the costs in this heading are higher than the
Board would wish on an ongoing basis. A further £111,000 (2001-£564,000) was
incurred relating to, and associated with, Pathfinder Recovery 2 PLC's actions
against the Group and certain of its directors. These matters are now closed
and no further costs should be incurred.
As indicated above, the results for 2002 also include a full year of
administrative costs relating to Pathfinder Recovery 1 Limited compared with
seven months of these costs in the previous year. Similarly a full year's
administrative costs for Pathfinder (River Quay) Limited and Pathfinder
(Scotland) Limited are included in the current year whilst, in the previous
year, the results included only a 50% share before May 2001.
Other operating income comprises net rents from development properties including
those from Lomond Galleries since May 2002. Share of operating profits in joint
ventures amounting to £352,000 (2001-£718,000) comprises this year of the
profits on the sale of Tib Street, Manchester, less the net operating loss on
Lomond Galleries to May 2002 and the holding costs associated with the Group's
new joint venture development in Newark.
After profits of £66,000 (2001 loss-£128,000) on the sale of residual BES
investment properties, the Group recorded a profit before interest of £535,000
(2001 loss-£962,000).
Net interest costs have risen during the year to £647,000 (2001-£309,000). This
is as a result of the consolidation of the borrowings relating to Lomond
Galleries on the balance sheet for the first time, and new loans taken out to
fund the River Quarter, Manchester, and North Gate, Newark, developments, partly
offset by a reduction in borrowings resulting from the sale of Merchant Village,
Glasgow, in the latter part of the year. All interest costs are written off to
the profit and loss account until development work commences on site.
As a result of these costs, the Group is reporting a loss on ordinary activities
before taxation amounting to £112,000 (2001-£1,271,000).
The tax charge for the year amounted to £84,000 (2001-tax credit of £201,000).
The charge arises principally as a result of profits on the sale of Merchant
Village which could not be offset elsewhere within the Group.
After tax, there was a loss of £196,000 (2001-£1,070,000) which, after
accounting for the share of profits and losses to minority shareholders in
subsidiary companies, leaves a loss attributable to members of the Company of
£103,000 (2001-£973,000).
It is intended, subject to shareholder approval, to pay a dividend of 0.25 pence
per share on 16 September 2003 to shareholders on the register at 8 August 2003.
The dividend payable shown in the profit and loss account is net of the
amounts receivable by the Group on the shares held by Pathfinder Recovery 1
Limited.
After accounting for those dividends a total of £276,000 is to be deducted from
reserves.
Net assets
The sale of Merchant Village, offset by the inclusion in the balance sheet of
Lomond Galleries for the first time and ongoing work at our other developments,
has resulted in a fall in work-in-progress from £21,824,000 in 2001 to
£15,365,000 at 31 December 2002.
The cash received from the Merchant Village sale was used in part to repay bank
borrowings on the site, to pay off loans due to Pathfinder Recovery 2 PLC
allowing us full control of the interests in River Quarter we had acquired from
them, to acquire a further 25% interest in our joint venture in Newark and to
fund operational and interest costs during the year.
With the exception of the investment in joint ventures which now primarily
comprises our investment in our joint ventures in Newark, the majority of other
changes to the balance sheet during the year arise from the effects of acquiring
Pathfinder Recovery Ventures Limited and the settlement with Pathfinder Recovery
2 PLC.
Acquired goodwill in the year amounting to £151,000 relates to that acquisition
and the associated increase in our interests in Pathfinder (River Quay) Limited
and Pathfinder (Scotland) Limited from 65% to 80%. The element of goodwill
relating to Pathfinder (Scotland) Limited has been written off, following the
sale of the Merchant Village development, giving a net balance of £142,000 of
goodwill carried forward at 31 December 2002. This balance is associated with
specific asset acquisitions and will be written off as those assets are sold.
The decrease in the investment in joint ventures, net of additions during the
year, arises on the consolidation of the previous net investment of £4,198,000
in Pathfinder Recovery Ventures Limited and Pathfinder (Loch Lomond) Limited as
joint ventures into the Group's assets during the year.
Also acquired as part of the acquisition of Pathfinder Recovery Ventures Limited
and shown in the balance sheet as a fixed asset investment is the shareholding
in ourselves owned by that company. This shareholding, which amounts to an 18.2%
interest in the Group at 31 December 2002, is valued at £2,729,000 in these
financial statements on the basis of the Group's net asset value per share at
that date. The revaluation surplus is shown in shareholders funds.
Minority interests have decreased from £1,764,000 at 31 December 2001 to
£1,079,000 at 31 December 2002. These interests, which represent the external
minority shareholders' interests in subsidiary companies within the Group, have
been reduced in the year principally as a result of the acquisition by the Group
of additional interests in River Quarter and Merchant Village.
Overall, shareholders' funds have increased during the year from £14,803,000
(representing 18.56p per ordinary share) to £14,958,000 (representing 18.76p per
ordinary share) before taking into account any increase in value over cost of
the ongoing projects held by the Group. Such value is not reflected in the
financial statements until the projects are sold.
Borrowings and cashflow
The Group's financing requirements relate mainly to the funding of property
development. Loan and overdraft facilities are arranged as necessary with a
number of banks aimed at meeting development finance requirements on a
cost-effective basis. The Board regards the main financial risks facing the
Group as liquidity risk and interest rate risk. Liquidity risk is managed by
balancing bank financing with internally generated funds and joint venture
finance, and by seeking to match loan periods with the expected planning and
development cycle of the properties being developed. Interest rate risk is
monitored by the Board and considered in relation to the length and level of
borrowing required. At 31 December 2002 the majority of development finance from
banks and other lenders was at variable rates.
The net operating cash inflow arising from sales less operational costs amounted
to £10,804,000 compared with a net operating cash outflow in 2001 of £2,022,000.
In addition, £730,000 net receipts arose from disposals within joint ventures
(2001-outflow of £502,000) and £81,000 (2001-£1,859,000) from sales of
investment properties, giving a total cash generation in the year of £11,615,000
(2001-outflow of £665,000). Net cash acquired with subsidiary undertakings
amounted to £1,702,000.
Major cash outflows during the period arose from net interest payments of
£307,000, the cost of acquisition of subsidiary companies of £1,069,000 and net
repayment of borrowings of £7,929,000. After placing £1,866,000 (2001-£nil) on
short term bank deposits, retained cashflow for the year was £2,089,000 (2001-
outflow of £3,623,000) leaving year end cash balances, including deposits, at
£6,474,000.
As a result of repayments, balance sheet borrowings fell from £13,191,000 to
£8,658,000 despite £3,352,000 of borrowings coming 'on-balance sheet' for the
first time as a result of corporate acquisitions. Of the total borrowings,
£1,328,000 (2001-£5,212,000) relates to loans from our joint venture partners
which are repayable, at the earliest, on the sale or refinancing of the
underlying developments. These are interest free and should be regarded as '
quasi equity' in those projects.
The net debt/equity ratio at 31 December 2002 was 0.15:1 (2001-0.72:1).
Events since the year end
On 14 March 2003, the Group acquired the outstanding 20% interest in Pathfinder
(River Quay) Limited and now controls a 100% interest in that company and its
development at River Quarter, Manchester.
Consideration for the acquisition, which was carried out by Pathfinder Recovery
Ventures Limited, amounted to £1,034,500 in cash and the transfer of 3,989,800
shares in Pathfinder Properties PLC owned by the Group. As a result of this the
number of shares held by the Group as a self-investment has decreased from
14,548,836 (18.2% of the issued share capital of the Group) to 10,559,036 (13.2%
of the issued share capital of the Group).
The Company has also issued, at various dates since 31 December 2002, 150,190
new ordinary shares in the Company to minority shareholders in Pathfinder
Recovery 1 Limited in exchange for their shares in that company. As a result of
these issues, the Group's interest in Pathfinder Recovery 1 Limited has
increased from 95.4% to 95.8%.
Development portfolio
Merchant Village, Glasgow (80% owned)
The Merchant Village, Glasgow, site was sold during the year to Selfridges PLC
for the development of their first Scottish store. The Group has no remaining
interest in the site.
River Quarter, Castlefield, Manchester (80% owned at year end; 100% owned March
2003)
The site comprises 3.25 acres within 15 minutes walk of the city centre adjacent
to the River Medlock.
During the year, Phase 2 of the development received planning consent for 191
residential apartments, 19,500 sq ft of commercial space and 191 car parking
spaces.
Phase 1 has existing planning consent, obtained in 2001, for 199 apartments,
19,500 sq ft of commercial space and 144 car parking spaces.
The masterplan, which sets the density for the whole site, has been approved in
principle and discussions have been started with the city planners in respect of
Phase 3 which is intended predominantly to comprise an office development of
155,000 sq ft and approximately 60 apartments. A further phase can also be
incorporated on the site.
The four phases were previously 65% owned by the Group. That interest was
increased to 80% with the acquisition of Pathfinder Recovery Ventures Limited
and, subsequent to the year end, the remaining minority interests have been
acquired bringing the development wholly in-house.
The Group is in discussions with selected partners with a view to announcing the
start of development on Phase 1 within the next few months.
North Gate, Newark (75% owned)
During the year the Group acquired a 50% interest in a 6.5 acre site next to the
River Trent on the edge of Newark through two joint venture companies. The Group
increased its interest in these ventures to 75% in December 2002.
The site contains a substantial Victorian Brewery building and has significant
potential for redevelopment. The Group is in discussion with a number of
companies who are interested in developing the site with us, either as
residential accommodation, as a supermarket or as retail space and has agreed
the principles of a phased residential development including a partial sale.
Northern Quarter, Manchester (60% owned)
The development of this small site in Back Turner Street remains difficult.
Informal approval has recently been received from both the planning authorities
and English Heritage for revised schemes of 20 apartments and 700sq ft of retail
space or 8,500 sq ft of office space and we are now in discussion with the
Heritage Trust as to the preferred option to take forward to detailed planning.
Lomond Galleries, Loch Lomond, Alexandria (100% owned)
Lomond Galleries is a 55,000 sq ft retail site, with good potential for
expansion, located close to Alexandria Town Centre and easily accessible from
the tourist routes to Loch Lomond.
We have rebranded the property, previously known as Loch Lomond Factory Outlets,
as 'Lomond Galleries' and are continuing to increase the amount of tenanted
space. The centre is not core to the Group's business and will not be retained
in the long term.
Previously 75% owned by the Group, the property became wholly owned on the
acquisition of Pathfinder Recovery Ventures Limited on 27 May 2002.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002
Notes Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
TURNOVER
Group and share of joint ventures 17,490 4,612
Less share of joint ventures (2,100) (4,085)
Group turnover 4 15,390 527
Cost of sales (13,980) (422)
Gross profit 1,410 105
Administrative expenses (1,451) (1,803)
(41) (1,698)
Other operating income 158 146
OPERATING PROFIT/(LOSS) BEFORE
SHARE OF JOINT VENTURES 117 (1,552)
Share of operating profits in joint ventures 352 718
OPERATING PROFIT/(LOSS) 4 469 (834)
Profit/(loss) on sale of investment properties 66 (128)
535 (962)
Interest receivable 263 290
Interest payable (910) (599)
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION 4 (112) (1,271)
Taxation
Group (296) 222
Joint ventures 212 (21)
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION (196) (1,070)
Equity minority interests 93 97
LOSS ON ORDINARY ACTIVITIES
ATTRIBUTABLE TO MEMBERS (103) (973)
Ordinary dividends 5 (173) (119)
Loss for the year transferred to reserves 9 (276) (1,092)
Loss per share 13 (0.13p) (1.30p)
The operating profit/(loss) arises from the Group's continuing operations.
A note of profits and losses on a historical cost basis is given in note 6.
A statement of total recognised gains and losses for the year is given in note
11.
CONSOLIDATED BALANCE SHEET
31 December 2002
Notes 31 Dec 2002 31 Dec 2001
£'000 £'000
FIXED ASSETS
Intangible fixed assets - Goodwill 142 136
Tangible assets 32 47
Investment in joint ventures 3
Share of gross assets 3,274 10,560
Share of gross liabilities (1,839) (4,893)
Goodwill 51 -
1,486 5,667
Investment in own shares 2,729 -
Other investments 152 152
4,541 6,002
CURRENT ASSETS
Work-in-progress 15,365 21,824
Debtors 913 866
Cash at bank 7 6,474 2,519
22,752 25,209
CREDITORS: amounts falling due within
one year 8 (3,926) (12,452)
NET CURRENT ASSETS 18,826 12,757
TOTAL ASSETS LESS CURRENT
LIABILITIES 23,367 18,759
CREDITORS: amounts falling due after
more than one year
Bank and other loans (7,330) (2,084)
PROVISIONS FOR LIABILITIES AND
CHARGES - (108)
16,037 16,567
EQUITY MINORITY INTERESTS (1,079) (1,764)
NET ASSETS 14,958 14,803
CAPITAL AND RESERVES
Called up share capital 7,975 7,975
Share premium account 1,946 1,946
Merger reserve 2,494 2,494
Revaluation reserve 431 -
Profit and loss account 9 2,112 2,388
EQUITY SHAREHOLDERS' FUNDS 14,958 14,803
Net assets per share attributable to ordinary
shareholders 18.76p 18.56p
CASH FLOW STATEMENT
for the year ended 31 December 2002
Notes Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
NET CASH INFLOW/(OUTFLOW)
FROM OPERATING ACTIVITIES 10,804 (2,022)
RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
Interest received 238 242
Interest paid (545) (227)
Net cash (outflow)/ inflow from returns
on investments and servicing of finance (307) 15
TAXATION
Corporation tax paid (57) (283)
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Receipts from sales of investment
properties 81 1,859
Receipts from/(payments to) joint ventures 730 (502)
Net cash inflow from capital expenditure
and financial investment 811 1,357
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertaking (1,069) (6,142)
Net cash acquired with subsidiary
undertaking 1,702 (140)
Net cash inflow/(outflow) from
acquisitions and disposals 633 (6,282)
EQUITY DIVIDENDS PAID - (471)
MANAGEMENT OF LIQUID
RESOURCES
Increase in treasury deposit accounts (1,866) -
FINANCING
Debt due within one year:
Loans drawn down 726 5,982
Loans repaid (8,309) (4,003)
Debt due in more than one year:
Loans drawn down 2,800 2,084
Loans repaid (3,146) -
Net cash (outflow)/inflow from financing (7,929) 4,063
INCREASE/(DECREASE) IN CASH 2,089 (3,623)
NOTES
1 BASIS
The figures shown for the year ended 31 December 2002 are unaudited and do not
constitute statutory financial statements within the meaning of the Companies
Act 1985. The financial statements for the year ended 31 December 2001 have been
reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement under s.237(2) or (3) of the Companies Act 1985.
2 ACCOUNTING POLICIES
The accounting policies adopted are consistent with those applied in previous
years except with regard to deferred taxation. This change has been made to
comply with Financial Reporting Standard 19 (FRS19) which is applied to the
financial statements for the first time. The comparative figures for the year
ended 31 December 2001 have not been restated as the adoption of FRS19 gives
rise to no material adjustment to the results, assets or liabilities as stated
for that year.
Investment properties are stated at valuation on 31 December 2002. The
investment in Pathfinder Properties PLC held by a subsidiary company is valued
at a net asset value per share equivalent to that of the Group's net asset value
per share at the balance sheet date.
3 ACQUISITIONS DURING THE YEAR
The Group acquired a controlling interest in Pathfinder Recovery Ventures
Limited and its subsidiaries, previously 50% owned joint ventures, on 27 May
2002. The Group's effective interest in Pathfinder (Loch Lomond) Limited, which
was also previously treated as a joint venture, increased from 74% to 98%. From
that date 100% of the results of those companies are included in the Group's
results for the year.
4 RESULTS FOR THE YEAR
The Group's turnover and results for the year arise principally from property
development activities.
The effect of acquisitions during the year is as follows:
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
Group turnover
Ongoing activities 15,390 527
Acquisitions - -
15,390 527
Operating profit/(loss)
Ongoing activities 496 (129)
Acquisitions (27) (705)
469 (834)
5 DIVIDENDS
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
Interim dividend 2001 - 0.15p
per share - 119
Final dividend 0.25p (2001 - nil)
per share 173 -
173 119
It is intended, subject to shareholder approval, to pay the final dividend for
the year on 16 September 2003 to members on the register at the close of
business on 8 August 2003. No interim dividend was paid. The final dividend for
the year ended 31 December 2002 is shown net of the amounts receivable by the
Group on the shares held by a subsidiary company.
6 NOTE OF HISTORICAL COST PROFIT AND LOSSES
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
Loss on ordinary activities before taxation (112) (1,271)
Realisation of revaluation gains of previous years - 647
Historical cost loss on ordinary activities
before taxation (112) (624)
7 ANALYSIS OF CASH AND CASH EQUIVALENTS
31 Dec 2002 31 Dec 2001
£'000 £'000
Short term bank deposits 1,866 -
Other cash at bank 4,608 2,519
6,474 2,519
8 CREDITORS DUE WITHIN ONE YEAR
31 Dec 2002 31 Dec 2001
£'000 £'000
Bank loans and overdrafts - 4,245
Other loans 1,328 5,212
Other creditors and accruals 2,598 2,995
3,926 12,452
Other loans comprise loans from minority shareholders in certain subsidiary
undertakings to fund their proportionate share of developments. These loans are
repayable on or after the sale or refinancing of the relevant developments.
9 PROFIT AND LOSS ACCOUNT
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
At 1 January 2,388 2,979
Transfer from revaluation reserve - 501
Loss for the year (276) (1,092)
At 31 December 2,112 2,388
10 SHAREHOLDERS' FUNDS
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
Retained loss for the year (276) (1,092)
Other recognised gains relating to the year 431 -
Shares issued in year - 1,270
155 178
At 1 January 14,803 14,625
At 31 December 14,958 14,803
11 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
Loss for the financial year attributable to members (103) (973)
Revaluation of investment in own shares 431
Total recognised gains and losses relating
to the year 328 (973)
12 RECONCILATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
Year ended Year ended
31 Dec 2002 31 Dec 2001
£'000 £'000
Operating profit/(loss) 469 (834)
Amortisation of goodwill 145 -
Share of profits in joint ventures (352) (718)
Decrease/(increase) in work-in-progress 10,356 (1,188)
Decrease in debtors 217 1,824
Increase/(decrease) in creditors 63 (1,200)
(Decrease)/increase in general provisions (94) 94
10,804 (2,022)
13 EARNINGS PER SHARE
The loss per ordinary share is based on the loss after taxation and minority
interests and on 79,745,428 (31 December 2001: 74,654,876 ordinary shares) being
the weighted average number of ordinary shares in issue during the year. There
is no difference between earnings and fully diluted earnings per share.
For further information, contact:
John Parry, Chairman or
Malcolm Bacchus, Finance Director Tel: (020) 7736 9669
Jeremy Carey, Tavistock Communications Tel: (020) 7600 2288
This information is provided by RNS
The company news service from the London Stock Exchange
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