Final Results

RNS Number : 5778V
Sutton Harbour Holdings PLC
30 May 2008
 

 

For Immediate Release

30 May 2008

SUTTON HARBOUR HOLDINGS PLC
Preliminary Results for the year ended 31 March 2008



Enquiries:             Nigel Godefroy, Sutton Harbour Holdings plc, 01752 204 186
                            Natasha Gadsdon, Sutton Harbour Holdings plc, 01752 204 186
                            Bobbie Hilliam, Evolution Securities, 020 7071 4300

Press Enquiries:    Paul Vann, Winningtons, 0117 920 0092



Chairman's Statement
For the year ended 31 March 2008


I am pleased to report that your Company has made significant progress towards a number of strategic objectives in the year under review. Against a backdrop of well documented difficulties in property and aviation sectors and turbulence in the financial markets, your Company has achieved highly creditable results for the year and worked successfully to secure new regeneration projects for the medium term pipeline and has introduced new Air Southwest routes.
These results are presented for the first time under Adopted International Financial Reporting Standards ('Adopted IFRS'). As such comparisons with results from previous years can be less clearly drawn. Under IFRS investment property valuation changes are recorded in the Income Statement. We have commissioned an independent external valuation of our asset portfolio and the resultant revaluation surplus on investment properties is included in this year's financial statements. Due to the nature of our regeneration activities we expect delivery of profits from regeneration projects to be more unevenly recognised. Shareholders are therefore encouraged to appraise our performance on the strength of the project pipeline and growth in valuation of net assets as well as earnings performance of the Group.


Results and dividend

Under Adopted IFRS we report a pre-tax profit of £5.5million, compared with a profit for 2007 of £3.3million. Net assets at the balance sheet date have increased by £4,391,000 to £39,684,000.  
 
Your Board proposes a final dividend of 1.5 pence per share, making 2.4 pence per share in total for the year. This represents a 19% increase over the previous year and follows the Board's decision to improve returns to shareholders. The final dividend will be payable on 22 August 2008 to shareholders on the register on 8 August 2008. The shares are expected to go ex-dividend on 6 August 2008.
 
Since the year end the developer we worked with on the residential element of the East Quays scheme has decided to withdraw due to current economic conditions.  In light of this, £2.13 million cumulative revenue was inappropriately recognised in the UK GAAP accounts for the years ended 31 March 2005, 2006 and 2007 and this has been reversed. We are re-appraising the scheme to increase the commercial space. Since the year end, we intend to reclassify this site as an investment property and it will be subject to revaluation in the current year. 


Regeneration

The revaluation of the Group's investment property assets resulted in a net surplus of £2.8m. This positive uplift demonstrates the strength and quality of the portfolio at a time when property markets are showing signs of weakening. It is the Group's intention to grow the investment property portfolio for stable earnings in the future unless it proves commercially beneficial to sell selected assets.
 
This investment strategy to develop our project pipeline will mean that gearing will increase further in the short to medium term. The group's gearing has increased from 27% to 46% since last year.
 
The development side of our regeneration activities continues to build on our specialism of partnering with public bodies to regenerate brownfield sites and waterfront areas. We have made progress with schemes in Exeter and St Austell and we have worked hard to build the pipeline for the medium term. During the past year we have been appointed by the South West of England Regional Development Agency as the preferred developer on a mixed-use scheme in Portland in readiness for the 2012 Olympic and Paralympic sailing events. We have also been appointed preferred partner by Swansea City Council on a substantial waterfront mixed-use regeneration project. Both these schemes demonstrate our success in extending the Group's geographical reach.
 
Where market conditions are judged favourable, the Group recycles certain property assets to generate cash and to crystallise the value added by the group and then invests into assets with growth potential. During the past year the Group has acquired 13,000 sq ft ground floor office space and two car parks within the harbour environs. The ground floor office space in the DWP building and other surplus land was sold.

The Group exchanged its interest in 'Plymouth Local Improvement Finance Trust' ('Plymouth LIFT') for shares in a new joint venture company. The new joint venture company holds shares in both Plymouth LIFT and East Hampshire LIFT.



Transport

Air Southwest has performed well during the last year with particular success in improving operational performance, load factor and passenger sales yield. We were rewarded for our efforts by being named the most punctual scheduled airline operating from Gatwick during 2007. We have added to our route network with new services out of Plymouth and Newquay to NewcastleGlasgowCork and Dublin which started on 28 April 2008.
 
The underlying airline business remains sound and ticket sales on the new routes have been encouraging. However, we are very mindful of the impact of escalating fuel prices and this will put pressure on airline results during the current year.
 
Many shareholders will be aware from the attendant publicity of the significant agreement we reached with Plymouth City Council during the year. This ground-breaking agreement aims to safeguard the city's aspirations for the current and future development of the airport whilst releasing surplus land for development and addressing environmental concerns. We are currently well advanced with planning submissions for the surplus land and I will provide an update on our progress with the half year results.  


Marine

The modernisation of our main Sutton Harbour Marina is now complete. We have made further improvements to the facilities and I am pleased to report our berths are fully let for the season. 
 
The new lock gates were commissioned in February and harbour operations have restored to normal working after a five month long refit. The new gates, designed to last thirty years, are essential to ensure continued effectiveness of flood defences. These works were disruptive to harbour users during this period and I thank them for their patience during the winter months.
 
The Group, with partners Plymouth City Council and South West of England Regional Development Agency, hosted the Artemis 2008 Transat race start earlier this month. The race village, constructed along the harbour's edge, had 24 race yachts berthed in the harbour and the Barbican Jazz Festival which ran for the week before the race started on 11 May. This event attracted over 100,000 visitors and provided an excellent opportunity for the Group to showcase Sutton Harbour.


Corporate Governance and staff

The Remuneration Report  [in the full Annual Report] has been expanded this year and we have undertaken an external review of remuneration arrangements for senior executives during the year. This review was to ensure that our remuneration policies are fair and competitive such that we continue to attract, retain and motivate good people, capable of growing the business. This has been a particularly challenging year and my thanks go to the management team and all our staff for their efforts, achievements and commitment to the Group.


Outlook

We have made a number of changes to the form and content of the annual report in order to give shareholders a more detailed insight into our objectives, progress and prospects. Going forward, we are operating in an increasingly difficult economic environment and the outlook remains challenging. Despite the underlying strength of our property portfolio we are not immune from the difficulties facing the property sector and we will have to work hard to maximise value from our regeneration projects. Equally, the challenge of high fuel prices and environmental concerns affect our transport sector. 
Your Company has a strong asset base, a good pipeline of projects and an experienced team. I believe our annual report demonstrates that the Group is well placed to continue its progress and deliver further growth in value in the future.



Michael Knight
Chairman
29 May 2008

 

Consolidated Income Statement
For the year ended 31 March 2008

 

 
 
2008
2007
 
 
£000
£000
 
 
 
 
 
 
 
 
Revenue
 
29,237
29,259
Cost of sales
 
(25,527)
(26,319)
 
 
             
             
Gross profit
 
3,710
2,940
Other operating income
 
20
22
Administrative expense
 
(1,465)
(954)
Other operating expenses
 
(33)
(59)
 
 
             
             
Operating profit before gains on investment properties
 
2,232
1,949
Fair value adjustments of investment property
 
2,828
2,200
 
 
             
              
Operating profit
 
5,060
4,149
 
 
 
 
Financial income
 
251
119
Financial expense
 
(835)
(965)
 
 
             
             
Net financing costs
 
(584)
(846)
 
 
             
             
Unrealised gain on exchange of shares in associate company
 
1,106
-
Share of loss of associate using the equity accounting method
 
(125)
(14)
 
 
 
 
 
 
981
(14)
 
 
 
 
 
 
             
             
Profit before tax
 
5,457
3,289
 
 
 
 
Taxation
 
(884)
(787)
 
 
             
             
 
Profit for the year attributable to the equity shareholders
 
 
 
4,573
 
2,502
 
 
             
             
Basic earnings per share
 
9.10p
5.13*p
Diluted earnings per share
 
8.94p
5.02*p



All figures relate to continuing activities.

* Adjusted for the one for one capitalisation issue.



 


Consolidated Statement of Recognised Income and Expense
For the year ended 31 March 2008

 
 
2008 
2007
 
 
£000
£000
 
 
 
 
 
 
 
 
Revaluation of property, plant and equipment
 
(2,036)
-
Tax recognised on income and expenses recognised directly in equity
 
575
115
Profit for the year
 
4,573
2,502
 
 
             
             
Total recognised income and expense for the year attributable to the equity shareholders
 
 
 
3,112
 
2,617
 
 
             
             




Consolidated Balance Sheet
As at 31 March 2008

 
 
 
 
 
 
2008 
2007 
 
 
£000
£000
 
 
 
 
Non-current assets
 
 
 
Property, plant and equipment
 
33,853
33,342
Intangible assets
 
541
576
Investment property
 
28,131
15,923
Investment in associate
 
-
828
Investment in joint venture
 
2,020
-
Other financial assets
 
130
130
 
 
             
             
 
 
64,675
50,799
 
 
             
             
Current assets
 
 
 
Inventories
 
5,448
3,898
Trade and other receivables
 
3,950
4,077
Cash and cash equivalents
 
6
6
Derivatives
 
82
14
Tax receivable
 
481
333
 
 
             
             
 
 
9,967
8,328
 
 
             
             
Total assets
 
74,642
59,127
 
 
             
             
 
 
 
 
Current liabilities
 
 
 
Bank overdraft
 
13,406
6,061
Other interest-bearing loans and borrowings
 
1,013
1,069
Trade and other payables
 
6,808
4,463
Deferred income
 
3,362
3,336
Deferred government grants
 
20
21
Derivatives
 
-
7
Provisions
 
229
-
 
 
             
             
 
 
24,838
14,957
 
 
             
             
Non-current liabilities
 
 
 
Other interest-bearing loans and borrowings
 
3,718
2,293
Deferred government grants
 
314
333
Provisions
 
-
40
Deferred tax liabilities
 
6,088
6,211
 
 
              
             
 
 
10,120
8,877
 
 
             
             
Total liabilities
 
34,958
23,834
 
 
             
             
 
Net assets
 
 
 
39,684
 
35,293
 
 
             
             
Equity and reserves
 
 
 
Share capital
 
12,622
6,112
Share premium
 
3
2,843
Other reserves
 
9,827
11,288
Retained earnings
 
17,232
15,050
 
 
             
             
 
Total equity
 
 
39,684
 
35,293
 
 
             
             


 



                                                                                                                                                Company Balance Sheet under UK GAAP
                                                                                                                                                                                       As at 31 March 2008

 
 
 
 
 
 
2008 
2007 
 
 
£000
£000
Fixed assets
 
 
 
Other investments
 
7,907
3,186
 
 
7,907
3,186
 
 
             
             
Current assets
 
 
 
Debtors
 
11,169
6,104
Cash at bank and in hand
 
7
32
 
 
11,176
6,136
 
 
             
             
Current liabilities
 
 
 
Creditors: amounts falling due within one year
 
(4,197)
(30)
 
 
 
 
Net current assets
 
6,979
6,106
 
 
 
 
Total assets less current liabilities
 
14,886
9,292
 
 
 
 
Provisions for liability and charges
 
 
 
Deferred taxation
 
-
(3)
 
 
             
             
Net assets
 
14,886
9,289
 
 
 
 
 
 
 
 
Capital and reserves
 
 
 
Called up share capital
 
12,622
6,112
Share premium account
 
3
2,843
Revaluation reserve
 
2,019
-
Other reserves
 
141
97
Profit and loss account
 
101
237
 
 
             
             
Equity shareholders funds
 
14,886
9,289
 
 
             
             




 

Consolidated Cash Flow Statement
For the year ended 31 March 2008

 
 
 
 
 
 
2008
2007
 
 
£000
£000
 
 
 
 
Cash flows from operating activities
 
 
 
Profit for the year
 
4,573
2,502
Adjustments for:
 
 
 
Taxation
 
884
787
Share of loss of associate
 
125
14
Financial income
 
(251)
(119)
Financial expense
 
835
965
Fair value adjustments of investment property
 
(2,828)
(2,200)
Unrealised gain on exchange of shares in associate company
 
(1,106)
-
Depreciation and amortisation
 
723
648
Amortisation of grants
 
(20)
(22)
Loss on sale of property, plant and equipment
 
33
59
Equity settled share-based payment expenses
 
44
74
 
 
             
             
Operating profit before changes in working capital and provisions
 
3,012
2,708
(Increase) in loan to associate
 
-
(124)
(Increase) in inventories
 
(3,553)
(753)
Decrease/(increase) in trade and other receivables
 
127
(384)
Increase/(decrease) in trade and other payables
 
989
(188)
Increase in deferred income
 
26
86
Increase in provisions
 
189
40
 
 
             
             
Cash generated from operations
 
790
1,385
 
 
 
 
Tax paid
 
(578)
(875)
 
 
             
             
Net cash from operating activities
 
212
510
 
 
             
             
Cash flows from investing activities
 
 
 
Proceeds from the sale of non-current assets held for sale
 
-
13,600
Proceeds from sale of property, plant and equipment
 
18
174
Acquisition of investment property
 
(7,088)
(1,272)
Acquisition of property, plant and equipment
 
(2,402)
(3,546)
Proceeds from the receipt of government grants
 
-
48
Interest received
 
162
30
Costs relating to new joint venture company
 
(40)
-
 
 
             
             
Net cash (used in)/from investing activities
 
(9,350)
9,034
 
 
             
             
Cash flows from financing activities
 
 
 
Proceeds from the issue of share capital
 
2,427
72
Issue costs relating to the issue of share capital
 
(94)
-
Proceeds from new loan  
 
2,350
1,669
Interest paid
 
(812)
(1,025)
Repayment of borrowings
 
(980)
(9,866)
Dividends paid 
 
(1,098)
(950)
 
 
             
             
Net cash from/(used in) financing activities
 
1,793
(10,100)
 
 
             
             
Net (decrease) in cash and cash equivalents
 
(7,345)
(556)
Cash and cash equivalents at beginning of the year
 
(6,055)
(5,499)
 
 
             
             
Cash and cash equivalents at end of the year
 
(13,400)
(6,055)
 
 
             
             


 


Note 1. Segment results

The Group's primary format for segment reporting is based on business segments. All of the Group's operations are carried out in the United Kingdom. The Group therefore has only one geographical segment.


Business segments:

 
   Marine Activities
 Property and   Regeneration
     Transport
   
     Consolidated
 
2008
2007
2008
2007
2008
2007
 
 
2008
2007
 
£000
£000
£000
£000
£000
£000
 
 
£000
£000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total external segment revenue
4,315
4,934
3,710
2,353
21,212
21,972
 
 
29,237
29,259
 
             
             
              
             
             
             
             
             
             
             
Segment result
1,101
947
5,015
4,028
409
128
 
 
6,525
5,103
Unallocated expenses
 
 
 
 
 
 
 
 
(1,465)
(954)
Group operating profit
 
 
 
 
 
 
 
 
5,060
4,149
 
             
             
             
             
             
             
             
             
             
             
Financial income
 
 
 
 
 
 
 
 
251
119
Financial expense
 
 
 
 
 
 
 
 
(835)
(965)
Profit on sale of share in associate company
 
 
 
 
 
 
 
 
1,106
-
Share of loss of associate
 
 
 
 
 
 
 
 
(125)
(14)
Taxation
 
 
 
 
 
 
 
 
(884)
(787)
 
             
             
             
             
             
             
             
             
             
             
Profit for the year
 
 
 
 
 
 
 
 
4,573
2,502
 
 
 
 
 
 
 
 
 
 
 
Assets and liabilities
 
 
 
 
 
 
 
 
 
 
Segment assets
21,117
22,422
34,600
21,151
15,933
14,112
 
 
71,650
57,685
Investment in equity accounted joint venture
 
 
 
 
 
 
 
 
1,930
-
Investment in equity accounted associate
 
 
 
 
 
 
 
 
-
828
Unallocated assets
 
 
 
 
 
 
 
 
581
281
Tax assets
 
 
 
 
 
 
 
 
481
333
 
             
             
             
             
             
             
             
             
             
             
Total assets
 
 
 
 
 
 
 
 
74,642
59,127
 
             
             
             
             
             
             
             
             
             
             
Segment liabilities
1,511
1,475
5,413
1,274
8,184
5,451
 
 
15,108
8,200
Unallocated liabilities
 
 
 
 
 
 
 
 
13,762
9,423
Tax liabilities
 
 
 
 
 
 
 
 
6,088
6,211
 
             
             
             
             
             
             
             
             
             
             
Total liabilities
 
 
 
 
 
 
 
 
34,958
23,834
 
 
 
 
 
 
 
 
 
 
 
 
Marine Activities
Property and Regeneration
Transport
Unallocated
Consolidated
 
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
 
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Other segment information
 
 
 
 
 
 
 
 
 
 
Capital expenditure:
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
1,220
852
-
1,485
1,552
1,150
155
59
2,927
3,546
Investment property
-
-
7,970
1,272
-
-
-
-
7,970
1,272
Depreciation
36
44
-
-
565
489
87
80
688
613
Amortisation
-
-
-
-
35
35
-
-
35
35
Provisions –charge to the income statement
-
-
-
-
189
40
-
-
189
40


Revenue can be divided into the following categories:

 
2008
2007
 
£000
£000
 
 
 
 
 
 
Sale of goods
3,252
4,031
Sale of land
1,630
-
Provision of services
6,591
5,681
Airline ticket sales
17,764
19,547
 
 
 
 
29,237
29,259




 Note 2.   

Since the year end the developer we worked with on the residential element of the East Quays scheme has decided to withdraw in light of current economic conditions. Following a review of the contract terms the group is unlikely to be able to enforce payment of revenue previously accounted under UK GAAP. In light of this £2.13 million cumulative revenue was inappropriately recognised in the years ended 31 March 2005, 2006 and 2007. Of this £930,000 related to year ended 31 March 2007. Taxation provided on the revenue at 30% has been reversed. The overall impact on net assets of the prior year adjustment has been a reduction of £1.491m; this has been corrected as an adjustment to the UK GAAP figures in the reconciliation of the transition to IFRS in the full annual report.  Furthermore, as a result of this adjustment, the IFRS comparatives reported in this preliminary announcement differ from those previously reported in the interim statement for the period ended 30 September 2007.

The effects in 2007 of the adjustment to the comparatives previously reported in the Interim Report 2007 are summarised below:

THE GROUP       
2007
2007
 
 
Income statement
£000
£000
 
 
 
 
 
 
 
Revenue as previously stated under UK GAAP
30,688
 
 
 
Prior year adjustment to revenue
(930)
 
 
 
IFRS adjustment
(499)
 
 
 
Restated revenue
 
29,259
 
 
 
 
 
 
 
Operating Profit as previously stated under UK GAAP
5,367
 
 
 
Prior year adjustment to operating profit
(930)
 
 
 
IFRS adjustment
(288)
 
 
 
Restated operating profit
 
4,149
 
 
 
 
 
 
 
Profit before tax as previously stated under UK GAAP
4,212
 
 
 
Prior year adjustment to profit before tax
(930)
 
 
 
IFRS adjustment
7
 
 
 
Restated profit before tax
 
3,289
 
 
 
 
 
 
 
Taxation as previously stated under UK GAAP
(1,266)
 
 
 
Prior year adjustment to taxation
279
 
 
 
IFRS adjustment
200
 
 
 
Restated taxation
 
(787)
 
 
 
 
 
 
 
Profit for the year attributable to equity shareholders as previously stated under UK GAAP
 
2,946
 
 
 
Prior year adjustment to profit for the year
(651)
 
 
 
IFRS adjustment
207
 
 
 
Restated profit for the year attributable to equity shareholders
 
2,502
 
 
 
 
 
 
 
Basic earnings per share as previously stated under UK GAAP
 
*6.05p
 
 
Restated basic earnings per share under UK GAAP
 
*4.71p
 
 
 
 
 
 
 
Diluted earnings per share as previously stated under UK GAAP
 
*5.92p
 
 
Restated diluted earnings per share under UK GAAP
 
*4.61p
 
 
 
 
 
 
 
* adjusted for one for one capitalisation issue
 
 
 
 


THE GROUP
2007
2007
 
 
Balance Sheet
£000
£000
 
 
 
 
 
 
 
Trade and other receivables as previously stated under UK GAAP
6,377
 
 
 
Prior year adjustment
(1,405)
 
 
 
IFRS adjustment
(895)
 
 
 
Restated trade and other receivables
 
4,077
 
 
 
 
 
 
 
Tax payable as previously stated under UK GAAP
306
 
 
 
Prior year adjustment
(639)
 
 
 
Restated tax receivable
 
333
 
 
 
 
 
 
 
Trade and other payables as previously stated under UK GAAP
3,778
 
 
 
Prior year adjustment
725
 
 
 
IFRS adjustment
(40)
 
 
 
Restated trade and other payables
 
4,463
 
 
 
 
 
 
 
Net assets as previously stated under UK GAAP
40,160
 
 
 
Prior year adjustment
(1,491)
 
 
 
IFRS adjustment
(3,376)
 
 
 
Restated net assets
 
35,293
 
 


 
 
 
 
 
Retained earnings as previously stated under UK GAAP
8,366
 
 
 
Prior year adjustment
(1,491)
 
 
 
IFRS adjustment
8,175
 
 
 
Restated retained earnings
 
15,050
 
 


  

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2008 or 2007. Statutory accounts for 2007, which were prepared under UK GAAP, have been delivered to the registrar of companies. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain statements under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2008, which are being prepared under IFRSs as adopted by the EU will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course. 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR SDESESSASELI
UK 100

Latest directors dealings