Interim Results

RNS Number : 3070T

Sutton Harbour Holdings PLC

12 December 2012

 

                                                                                                                        12 December 2012

Sutton Harbour Holdings plc

Interim Results for the six month period to 30 September 2012

Sutton Harbour Holdings plc ("Sutton Harbour", "the Company"), the AIM listed marine and waterfront regeneration specialist, announces interim results for the six month period to 30 September 2012. 

Financial highlights

·      Trading activities have continued in line with expectations

·      Revenues of £3.93m (2011: £6.06m)

·      Gross operating profit* £1.49m (2011: £2.74m)

·      Revaluation generates a deficit of £2.59m (2011: £0.38m) through the income statement

·      After that charge there is a loss before tax £2.75m (2011 loss £0.65m)

·      Net assets of £36.9m (2011: £41.5m)

·      Net debt of £16.8m (2011: £15.8m)

* Before administration costs and asset impairments

Operational highlights

·      Launch of Sutton Harbour Destination Initiative to transform Sutton Harbour into one of the UK's most attractive waterfront locations

·      Indicative master-plan prepared for 113 acre airport site

·      Relocation of head office operations

·      Achieved completion of the lease and construction agreements for the new King Point Marina development in the Millbay area of Plymouth.

Michael Knight, Chairman, commented:

"During the first half year trading has continued in line with our expectations of challenging trading conditions and we have been implementing specific strategies to build profile and to target new markets. The Company has established its position as a niche real estate operator specialising in waterfront destinations and associated marine activities. We are actively pursuing our plans for the delivery of King Point Marina and marketing of berths; making progress with future ideas for "Destination Sutton Harbour" as well as the former airport site; and, managing the Sutton Harbour estate for long-term income and asset growth."

For further information, please contact

Sutton Harbour Holdings plc Jason Schofield - Chief Executive Natasha Gadsdon - Finance Director	01752 204186
Arden Partners Richard Day Jamie Cameron	0207 614 5917
Newgate Threadneedle Graham Herring Terry Garrett Robyn McConnachie	0207 653 9850

Chairman's Statement 

Overview

During the first half year the Company has made significant progress in advancing its plans for the Sutton Harbour area and also for alternative uses on the former airport site in line with its strategy to be a leading marine, waterfront regeneration and destination specialist in Southern England.

As recently announced, the Company has formally launched its master-plan as a blueprint for the evolution of Sutton Harbour into a visitor destination of regional and national significance. This sets out the vision of bringing together existing attractions of the historic Barbican quarter and Mayflower Steps, the National Marine Aquarium, numerous restaurants and bars and establishing firmer links with the waterfront and Hoe and the City Centre. The master-plan features opportunities for food and beverage outlets, retail, office, hotel and high quality residential development, brought together with improved access all around the harbour perimeter.

It is now almost a year since Plymouth City Airport was closed and no financially substantiated offers have been made by any third parties to acquire the Company's interest and to re-open an airport facility on a commercially sustainable basis. Accordingly, the Company has prepared an indicative master-plan to show what the 113 acre site could deliver as part of the evolving planning policy for the City of Plymouth. The Company is entitled to a 25% share of net proceeds from disposal of the site for alternative use.

Trading activities have continued in line with expectations during the first half year. After a period of sustained growth we are now experiencing a levelling of results in the marine operations segment and the marina team are working hard to maintain berthing occupancy levels. Given the continuing economic malaise, we are now more cautious about improving property occupancy rates in the second half year although going forward these should improve with the increased marketing of Sutton Harbour as a destination. Demand for quality space remains good, although end users are taking more time to make longer term commitments.

The Company continues to take advantage of good estate management opportunities and has recently relocated its head office operations to the smaller Tin Quay House. Its previous head office space, at North Quay House, has now been let to a high quality tenant.

I am pleased to report that we have achieved completion of the lease and construction agreements for the new King Point Marina development in the Millbay area of Plymouth. Construction of the marine and shoreside facilities will commence in January 2013 and is expected to be complete during Summer 2013.

Results and Financial Position

In line with the rest of the UK, the South West area of the country is experiencing difficult market conditions in the property sector. The continuing overall economic situation has clearly had an effect on property prices and it is clear that advisers in the sector are also taking a conservative position on values. We appointed a new firm of independent valuers, DTZ, during the period and they have conducted a valuation of the majority of our estate. The result of this valuation shows a reduction in asset value, reflecting reticent sentiment about provincial commercial space and a general lack of current and relevant evidence of trading specialist assets such as our marina. The valuation does not reflect any marked change in marina occupancy rates and resulted in net initial yield movement on the investment portfolio from 8.0% to 8.6%. In addition, another firm of valuers was commissioned to value the fishmarket, but the recently received results showed that the valuation was inconsistent with the principles adopted for the rest of the estate and the board has decided to retain the independent valuation as at 31 March 2012 of the fishmarket. Overall, the revised values give rise to a deficit of £4.905m (2011: £0.282m). Of this, a £2.593m deficit (2011: £0.380m) is recognised through the income statement in relation to the investment portfolio and a £2.312m deficit (2011: £0.098m surplus) is accounted to the revaluation reserve in relation to the owner-occupied portfolio. Notwithstanding the disappointing downward valuation movement of certain properties, the Directors consider there is considerable potential for value recovery and growth in the portfolio as the development vision is realised. A valuation will be commissioned for our entire portfolio for the year ending 31 March 2013, as in previous years.

The Company's net assets at 30 September 2012 were £36.9m (31 March 2012: £41.5m), expressed as 38.3p per share (31 March 2012: 43.1p per share).

Gearing, expressed as total debt over net assets is 45.5 per cent as at 30 September 2012 (31 March 2012: 38.2 per cent), with net bank debt standing at £16.8m (31 March 2012: £15.8m). As anticipated, the Company expects to see an increase in bank debt over the second half year, once construction starts on King Point Marina in the Millbay area of Plymouth. The Company continues to operate comfortably within its banking covenants.

The Company achieved a gross operating profit of £1.492m (2011: profit £2.741m) before accounting for administration costs and asset impairments and a loss before taxation of £2.751m (2011: £0.652m loss) for the period. The results for the comparative period include £0.517m loss in relation to costs of closure of the airport business.

As previously reported, the half year results include final consideration in connection with the disposal of surplus airport land to a developer and the profit on disposal of the investment in Express LIFT Investments Limited, a public private partnership engaged in the provision of healthcare premises. A further write down of project inventory amounting to £0.639m has been made in the period (2011: £0.970m).

The Board is not recommending payment of an interim dividend (2011: nil), as it continues to work through and more firmly establish its strategies for future growth.

Summary and Outlook

We have made considerable progress to reduce costs together with changes to our professional advisers including auditors, lawyers and valuers. Ongoing administrative expenses have continued to contract.

During the first half year trading has continued in line with our expectations of challenging trading conditions and we have been implementing specific strategies to build profile and to target new markets. The Company has established its position as a niche real estate operator specialising in waterfront destinations and associated marine activities. We are actively pursuing our plans for the delivery of King Point Marina and marketing of berths; making progress with future ideas for "Destination Sutton Harbour" as well as the former airport site; and, managing the Sutton Harbour estate for long-term income and asset growth.

Michael Knight

Chairman

Consolidated Income Statement

	Note	6 months to 30 September 2012 (unaudited) £000	6 months to 30 September 2011 (unaudited) £000	Year Ended 31 March 2012 (audited) £000
Revenue	3	3,925	6,060	9,898
Cost of sales before impairment of assets		(2,433)	(3,319)	(5,929)
Impairment of assets		(639)	(970)	(1,330)
Cost of Sales		(3,072)	(4,289)	(7,259)
Gross Profit		853	1,771	2,639
Administrative expenses before fair value adjustment on investment property		(665)	(988)	(1,482)
Fair value adjustment on investment property	8	(2,593)	(380)	101
Other operating expense		-	(517)	-
Administrative Expenses		(3,258)	(1,885)	(1,381)
Operating (loss)/profit	3	(2,405)	(114)	1,258
Financial income		5	4	68
Financial expense		(428)	(542)	(871)
Net financing costs		(423)	(538)	(803)
Profit on disposal of shares in associate	4	77	-	-
(Loss)/profit before tax from continuing operations		(2,751)	(652)	455
Taxation on loss /(profit) from continuing operations	5	449	169	210
(Loss)/profit for the period from continuing operations		(2,302)	(483)	665
Loss for the period from discontinued operations	12	-	(500)	(1,632)
Loss for the period		(2,302)	(983)	(967)
Basic (loss)/earnings per share	7
From continuing operations		(2.39)p	(0.77)p	0.96p
From discontinued operations		- p	(0.79)p	(2.34)p
Total basic loss per share		(2.39)p	(1.56)p	(1.38)p
Diluted (loss)/earnings per share	7
From continuing operations		(2.39)p	(0.77)p	0.96p
From discontinued operations		- p	(0.79)p	(2.34)p
Total diluted loss per share		(2.39)p	(1.56)p	(1.38)p

Consolidated Statement of Comprehensive Income

		6 months to 30 September 2012 (unaudited) £000	6 months to 30 September 2011 (unaudited) £000	Year Ended 31 March 2012 (audited) £000
Loss for the period		(2,302)	(983)	(967)
Other comprehensive (expense)/income
Continuing operations:
Revaluation of property, plant and equipment		(2,312)	98	958
Effective portion of changes in fair value of cash flow hedges		8	(312)	(242)
Total other comprehensive (expense)/income		(2,304)	(214)	716
Total comprehensive expense for the period attributable to equity shareholders		(4,606)	(1,197)	(251)

Consolidated Balance Sheet

	Note	As at 30 September 2012 (unaudited) £000	As at 30 September 2011 (unaudited) £000	As at 31 March 2012 (audited) £000
Non-current assets
Property, plant and equipment	8	27,616	29,744	30,054
Investment property	8	18,197	20,646	20,753
Investment in associate		-	43	43
		45,813	50,433	50,850
Current assets
Inventories		12,225	12,457	12,715
Trade and other receivables		1,119	3,278	1,600
Cash and cash equivalents	9	193	1	2,508
Tax recoverable		37	112	200
		13,574	15,848	17,023
Total assets		59,387	66,281	67,873
Current liabilities
Bank borrowings	9	-	2,463	-
Other interest-bearing loans and borrowings		2,000	1,516	3,350
Trade and other payables		775	1,669	1,618
Deferred income		808	832	1,342
Deferred government grants		-	38	1
Provisions for other liabilities and charges	10	119	2,493	832
		3,702	9,011	7,143
Non-current liabilities
Other interest-bearing loans and borrowings		15,000	18,000	15,000
Deferred government grants		678	681	700
Deferred tax liabilities		2,805	3,322	3,218
Derivative financial instruments		301	379	309
		18,784	22,382	19,227
Total liabilities		22,486	31,393	26,370
Net assets		36,901	34,888	41,503
Issued capital and reserves attributable to owners of the parent
Share capital	11	16,069	15,736	16,069
Share premium		5,368	12	5,368
Other reserves		11,978	13,352	14,282
Retained earnings		3,486	5,788	5,784
Total equity		36,901	34,888	41,503

Consolidated Statement of Changes in Equity

	Share capital	Share premium	Revaluation reserve	Merger reserve	Hedging reserve	Retained earnings	TOTAL
			----------Other Reserves----------
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 April 2011	15,736	12	9,762	3,871	(67)	6,767	36,081
Comprehensive income/(expense)
Loss for the period	-	-	-	-	-	(983)	(983)
Other comprehensive income/(expense)
Revaluation of property, plant and equipment	-	-	98	-	-	-	98
Effective portion of changes in fair value of cash flow hedges	-	-	-	-	(312)	-	(312)
Total other comprehensive income/(expense) - period ended 30 September 2011	-	-	98	-	(312)	-	(214)
Total comprehensive income/(expense)  - period ended 30 September 2011	-	-	98	-	(312)	(983)	(1,197)
Transactions with owners
Share-based payments - value of employee services	-	-	-	-	-	4	4
Transactions with owners	-	-	-	-	-	4	4
As at 30 September 2011	15,736	12	9,860	3,871	(379)	5,788	34,888
Comprehensive income
Profit for the period	-	-	-	-	-	16	16
Other comprehensive income
Revaluation of property, plant and equipment	-	-	860	-	-	-	860
Deferred taxation on revaluation of property, plant and equipment	-	-	-	-	-	-	-
Effective portion of changes in fair value of cash flow hedges	-	-	-	-	70	-	70
Total other comprehensive income  - period ended 31 March 2012	-	-	860	-	70	-	930
Total comprehensive income - period ended 31 March 2012	-	-	860	-	70	16	946
Transaction with owners
Proceeds from issue of shares net of costs	333	5,356	-	-	-	-	5,689
Share-based payments - value of employee services	-	-	-	-	-	(20)	(20)
Transactions with owners	333	5,356	-	-	-	(20)	5,669
As at 31 March 2012	16,069	5,368	10,720	3,871	(309)	5,784	41,503
Comprehensive income/(expense)
Loss for the period	-	-	-	-	-	(2,302)	(2,302)
Other comprehensive income/(expense)
Revaluation of property, plant and equipment	-	-	(2,312)	-	-	-	(2,312)
Effective portion of changes in fair value of cash flow hedges	-	-	-	-	8	-	8
Total other comprehensive income/(expense)  - period ended 30 September 2012	-	-	(2,312)	-	8	-	(2,304)
Total comprehensive income/(expense) - period ended 30 September 2012	-	-	(2,312)	-	8	(2,302)	(4,606)
Transactions with owners
Share-based payments - value of employee services	-	-	-	-	-	4	4
Transactions with owners	-	-	-	-	-	4	4
As at 30 September 2012	16,069	5,368	8,408	3,871	(301)	3,486	36,901

Consolidated Cash Flow Statement

	Note	6 months to 30 September 2012 (unaudited) £000	6 months to 30 September 2011 (unaudited) £000	Year Ended 31 March 2012 (audited) £000
Cash (used in)/generated from continuing operating activities	13	(934)	984	2,275
Net cash used in discontinued operating activities		-	(1,370)	(1,475)
Cash (used in)/generated from total operating activities		(934)	(386)	800
Tax received		201	466	466
Net cash (used in)/generated from operating activities		(733)	80	1,266
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		111	9	9
Proceeds from sale of shares in associate		120	-	-
Disposal of discontinued operations, net of cash		-	(15)	(28)
Expenditure on investment property		(37)	(198)	(383)
Expenditure on property, plant and equipment		(51)	(261)	(287)
Interest received		6	4	7
Net cash generated from/(used in) investing activities		149	(461)	(682)
Cash flows from financing activities
Proceeds from issue of share capital		-	-	5,689
Interest paid		(381)	(580)	(1,096)
Repayment of borrowings		(1,350)	(490)	(1,650)
Cash flow from financing activities in discontinued operations		-	(11)	(19)
Net cash (used in)/generated from financing activities		(1,731)	(1,081)	2,924
Net (decrease)/increase in cash and cash equivalents		(2,315)	(1,462)	3,508
Cash and cash equivalents at beginning of period		2,508	(1,000)	(1,000)
Cash and cash equivalents at end of period	9	193	(2,462)	2,508

Notes to Interim Report

1.    General information

This consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 March 2012 were approved by the Board of Directors on 26 June 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006.

Copies of the Group's financial statements are available from the Company's registered office, Tin Quay House, Sutton Harbour, Plymouth, PL4 0RA and on the Company's website www.sutton-harbour.co.uk.

This consolidated interim financial information has not been audited.

2.    Basis of preparation

The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2012, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) interpretations as endorsed by the European Union, and those parts of the Companies Acts 2006 as applicable to companies reporting under IFRS.

Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2012, as described in those annual financial statements.

Adoption of new International Financial Reporting Standards

The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 April 2012, but are not currently relevant for the Group:

-     Amendments to IAS 1, 'Presentation of items of Other Comprehensive Income' - not applicable to current activity.

-     Amendment to IAS 19, 'Employee benefits' - not applicable to current activity.

-     IFRS 10, 'Consolidated Financial Statements' - not applicable to current activity.

-     IFRS 11, 'Joint Arrangements' - not applicable to current activity.

-     IFRS 12 'Disclosure of Interests in Other Entities' - no impact on current activities.

-     IFRS 13 'Fair Value Measurement' - not applicable to current activity.

-     IAS 27 'Separate Financial Statements' - no impact on current activities.

-     IAS 28 'Investments in Associates and Joint Ventures - no impact on current activities.

-     Amendments to IFRS 7 'Disclosures - Offsetting Financial Assets and Financial Liabilities' - no impact on current activities.

-     Amendments to IFRS1 'Government Loans' - no impact on current activities.

-     Improvements to IFRSs (2012) - no impact on current activities

The following new standards, amendments to standards or interpretations have been issued, but are not effective for the financial year beginning 1 April 2012 and have not been adopted early:

-     Amendment to IAS 32 'Offsetting Financial Assets and Financial Liabilities' - not yet endorsed - effective 1 January 2014.

-     IFRS 9 'Financial instruments' - not yet endorsed - effective 1 January 2015.

Accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

There have been no significant changes to estimates and judgements since the signing of the financial statements for the year ended 31 March 2012.

3.  Segment information

Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

The Board of Directors considers the business from an operational perspective as the Group has only one geographical segment, with all operations being carried out in the United Kingdom.

The Board of Directors considers the performance of the operating segments using operating profit. The segment information provided to the Board of Directors for the reportable segments for the period ended 30 September 2012 is as follows:

	6 months to 30 September 2012	6 months to 30 September 2011	12 months to 31 March 2012
	(unaudited)	(unaudited)	(audited)
	£000	£000	£000
External revenue:
Marine	2,594	2,886	5,477
Real estate	988	882	1,729
Regeneration	343	2,292	2,692
Total external revenue = total revenue	3,925	6,060	9,898
Segment operating profit/(loss):
Marine	678	770	1,320
Real estate prior to fair value adjustment of investment property	565	367	1,071
Fair value adjustment of investment property	(2,593)	(380)	101
Real estate after fair value adjustment of investment property	(2,028)	(13)	1,172
Regeneration prior to impairment of inventories	249	1,604	1,578
Impairment of inventories	(639)	(970)	(1,330)
Regeneration after impairment of inventories	(390)	634	248
	(1,740)	1,391	2,740
Unallocated expenses:
Administrative expenses	(665)	(988)	(1,482)
Other operating expense	-	(517)	-
Group operating (loss)/profit	(2,405)	(114)	1,258
Profit on sale of shares in associate	77	-	-
Financial income	5	4	68
Financial expense	(428)	(542)	(871)
Taxation	449	169	210
Transport - discontinued operations	-	(500)	(1,632)
Loss for the period	(2,302)	(983)	(967)
Assets and liabilities
Segment assets:
Marine	20,690	22,999	23,027
Real estate	19,251	21,966	21,900
Regeneration	12,326	12,250	12,705
Transport - discontinued operations	6,272	7,640	6,333
Total segment assets	58,539	64,855	63,965
Unallocated assets: Property plant & equipment                                  Investment in associate                                 Trade & other receivables                                 Cash & cash equivalents                                 Tax receivable	333 - 285 193 37	545 43 726 - 112	503 43 654 2,508 200
Total assets	59,387	66,281	67,873

Segment liabilities:
Marine	911	1,138	1,683
Real estate	490	2,064	116
Regeneration	64	194	309
Transport - discontinued operations	757	1,829	2,074
Total segment liabilities	2,222	5,225	4,182
Unallocated liabilities: Bank overdraft & borrowings                                    Trade & other payables                                    Financial Derivatives                                    Tax payable	17,000 158 301 -	21,973 494 379 -	18,350 311 309 -
Deferred tax liabilities	2,805	3,322	3,218
Total liabilities	22,486	31,393	26,370

Unallocated assets included in total assets and unallocated liabilities included in total liabilities are not split between segments as these items are centrally managed.

4. Disposal of shares in associate

In April 2012 Sutton Harbour Holdings plc completed the sale transaction of its interest in Express Lift Investments Limited for £503,000. This included repayment of loan notes of £320,000, interest on the loan notes of £63,000 and payment for the shares of £120,000. This resulted in a profit before tax on disposal of £77,000.

5. Taxation

Continuing Operations

The Company has applied an effective tax rate of 16% (2011: 26%) based on management's best estimate of the tax rate expected for the full financial year.

Discontinued Operations

In the prior year the Company applied an effective tax rate of 26% to the trading losses of the discontinued operations.

6. Dividends

The Board of Directors do not propose an interim dividend (2011: nil).

7. Earnings per share

	6 months to 30 September 2012 (unaudited) pence	6 months to 30 September 2011 (unaudited) pence	Year Ended 31 March 2012 (audited) pence
Continuing operations
Basic (loss)/earnings per share	(2.39)p	(0.77)p	0.96p
Diluted (loss)/earnings per share	(2.39)p*	(0.77)p*	0.96p*
Discontinued operations
Basic loss per share	- p	(0.79)p	(2.34)p
Diluted loss per share	- p*	(0.79)p*	(2.34)p*

Basic Earnings per Share:

Basic earnings per share have been calculated using the loss for the period of £2,302,000 (2011: £483,000) for the continuing operations, and the loss for the period of £nil (2011: £500,000) for the discontinued operations. The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 96,277,086 (2011: 62,943,752; year ended 31 March 2012: 69,701,743) has been used in our calculation.

Diluted Earnings per Share:

Diluted earnings per share uses an average number of 96,380,937 (2011: 63,193,851; year ended 31 March 2012: 69,701,743) ordinary shares in issue, and takes account of the outstanding options under the SAYE scheme in accordance with IAS 33 'Earnings per share'.

7. Earnings per share (continued)

* For the 6 months ended 30 September 2012, the year ended 31 March 2012, and the 6 months ended 30 September 2011, there is no adjustment for the effect of all dilutive potential ordinary shares because the exercise prices of the options are greater than the average market price of the shares during the year.

8. Property valuation

Freehold land and buildings, with the exception of the Fishmarket, and investment property have been independently valued by DTZ as at 30 September 2012, in accordance with the Practice Statements in the Valuations Standards (The Red Book) published by the Royal Institution of Chartered Surveyors. 

The Fishmarket was valued by another firm but was inconsistent with the principles adopted for the rest of the estate and these accounts incorporate the independent valuation on that asset as at 31 March 2012. A further valuation will be commissioned for our entire portfolio for the year ending 31 March 2013, as in previous years.

9. Cash and cash equivalents

	As at 30 September 2012 (unaudited) £000	As at 30 September 2011 (unaudited) £000	As at 31 March 2012 (audited) £000
Continuing operations:
Cash and cash equivalents per balance sheet	193	1	2,508
Bank borrowings	-	(2,463)	-
Cash and cash equivalents per cash flow statement	193	(2,462)	2,508

10. Provisions

	Provision
	£000
Balance at 1 April 2011	2,636
Provisions made during the period	788
Provisions used during the period	(931)
Balance at 30 September 2011	2,493
Provisions made during the period	-
Provisions used during the period	(1,587)
Provisions written back during the period	(74)
Balance at 31 March 2012	832
Provisions made during the period	-
Provisions used during the period	(713)
Balance at 30 September 2012	119
Non-current	-
Current	119
	119

The total provision of £119,000 relates to the provision for airport works required to be carried out which were a condition of the planning consent for development on surplus airport land. 

11. Issue of Shares

On 18 January 2012 Sutton Harbour Holdings plc undertook a share placing and open offer.

In order to issue the new shares, a share reorganisation was required. Each Ordinary share of 25p nominal value was sub-divided into 1 Ordinary share of 1p nominal value and 1 deferred share of 24p nominal value.

The share placing and open offer resulted in the issue of 33,333,334 new Ordinary shares each with a nominal value of 1p, issued at a price of 18p each. The net proceeds after issue costs were £5.7m. The £5.4m excess of the value of the shares issued over the nominal value of Ordinary shares was credited to the Company's Share Premium Reserve.

12. Discontinued operations

In December 2011 the Group ceased all operations at Plymouth City Airport. All trading activities relating to the airport have therefore been classified as discontinued activities at 31 March 2012. There were no transactions relating to discontinued activities in the 6 months to 30 September 2012. The results for the 6 months to 30 September 2011 have been restated.

A charge of £508,000 relating to the impairment of related property, plant and equipment and inventory is included in the discontinued operations' cost of sales for the year ended 31 March 2012.

	6 months to 30 September 2012 (unaudited) £000	6 months to 30 September 2011 (unaudited) £000	Year Ended 31 March 2012 (audited) £000
Revenue	-	834	1,156
Cost of sales	-	(1,508)	(3,112)
Gross loss	-	(674)	(1,956)
Other operating income	-	-	-
Administrative expenses	-	-	-
Operating loss	-	(674)	(1,956)
Financial income	-	-	-
Financial expense	-	(2)	(3)
Net financing costs	-	(2)	(3)
Trading loss before tax from discontinued operations	-	(676)	(1,959)
Taxation on trading loss from discontinued operations	-	176	327
Trading loss after tax from discontinued operations	-	(500)	(1,632)

Cash flows

	6 months to 30 September 2012 (unaudited) £000	6 months to 30 September 2011 (unaudited) £000	Year ended 31 March 2012 (audited) £000
Cash flows from discontinued operations
Operating	-	(1,370)	(1,475)
Investing	-	(15)	(28)
Financing	-	(11)	(19)
Net cash outflow	-	(1,396)	(1,522)

13. Cash flow statements

	6 months to 30 September 2012 (unaudited) £000	6 months to 30 September 2011 (unaudited) £000	Year Ended 31 March 2012 (audited) £000
Cash flows from operating activities
(Loss)/profit for the period	(2,302)	(483)	665
Adjustments for:
Taxation	(449)	(169)	(210)
Financial income	(6)	(4)	(68)
Financial expense	428	542	871
Fair value adjustments on investment property	2,593	380	(101)
Depreciation and amortisation	53	33	78
Amortisation of grants	(24)	36	(5)
Impairment of development property	639	970	1,330
Loss on sale of property, plant and equipment	12	1	13
Gain on disposal of interest in associate	(77)	-	-
Equity settled share-based payment expenses	4	4	(5)
Grants received	-	53	53
Cash generated from operations before changes in working capital and provisions	871	1,363	2,621
(Increase)/decrease in inventories	(148)	(13)	84
Decrease in trade and other receivables	481	143	255
Decrease in trade and other payables	(890)	(538)	(653)
Decrease in deferred income	(535)	(588)	(46)
(Decrease)/increase in provisions	(713)	617	14
Cash (used in)/generated from operations	(934)	984	2,275

14. Contingencies

On 26 October 2007, the Group entered into an agreement with the BBC to construct a 22,000 sq. ft. office building by a longstop date of December 2012. To date, the Group has not contracted for the construction of this development although it has agreed heads of terms with a developer to deliver a workable scheme, but terms have not been agreed with the BBC. It is not considered appropriate to make any provision in this regard.

Since Plymouth City Council agreed, in August 2011, the closure of the airport on 23 December 2011, the Group is obliged to work with the freeholder to obtain best value for the land through alternative use. In addition, the government grants of £804,000 may be subject to claw-back, settled out of the proceeds on the disposal.

15. Capital Commitments

The Company has entered into agreements to construct a new marina together with shoreside facilities in the Millbay area of Plymouth and is committed to costs of £3.6m.

 

END

 

 

IR FFLLFLLFBFBL