Interim results

RNS Number : 8910R
Sutton Harbour Holdings PLC
15 December 2016
 

 

                                                                            

 

15 December 2016

SUTTON HARBOUR HOLDINGS PLC ("the Group")

Interim results for the six month period to 30 September 2016

 

Sutton Harbour Holdings plc ("Sutton Harbour", "the Company"), the AIM listed marine and waterfront regeneration specialist, announces its interim results for the six month period to 30 September 2016. 

 

Financial Highlights

 

 

·      Adjusted* profit before tax £0.232m (2015: £0.249m);

·      Loss before tax of £0.038m (2015: profit of £1.261m);

·      Net assets of £40.025m (31 March 2016: £40.869m);

·      Net assets per share 41.6p (31 March 2016: 42.4p);

·      Net debt £22.737m (31 March 2016: £22.213m).

 

*Excluding fair value adjustments

 

Highlights

 

·      Further representation submitted to Joint Local Plan public consultation in respect of Former Airport Site and Sutton Harbour

·      Marketing process underway for Sugar House (East Quay)

·      Sutton Harbour hosted the start of the Trans Atlantic Race 2016

·      Appointed Rothschild to undertake a strategic review of options (21 April 2016) which could include a sale of the Company

 

Graham Miller, Chairman, commented:

 

"The Group has clear priorities: to pursue vigorously the planning allocation for the Former Airport Site, to accelerate the progress of other regeneration projects and to grow revenue and profits at the marine businesses and the investment property portfolio."

 

 For further information, please contact

 

Sutton Harbour Holdings plc

Jason Schofield - Chief Executive

Natasha Gadsdon - Finance Director

 

01752 204186

Arden Partners (Nomad and Broker)

James Felix

Benjamin Cryer

 

020 7614 5917

Rothschild (Financial Adviser)

John Byrne

Stephen Griffiths

 

020 7280 5000

Yellow Jersey

Charles Goodwin

07747 788221

 

 


 

Chairman and Chief Executive's Statement

 

 

Excluding fair value adjustments, the adjusted profit before taxation for the six month period ending 30 September 2016 was £0.232m (2015: £0.249m). Gross profit generated by the trading activities (excluding impairment of assets) was £1.513m compared with £1.465m for the comparative period in 2015.

 

As at 30 September 2016, net assets were £40.025m (41.6p per share), having decreased slightly from £40.869m at 31 March 2016 (42.4p per share). The decrease of £0.844m (0.8p per share) incorporates the results of the independent property portfolio valuation as at 30 September 2016 which, despite a valuation adjustment surplus of £0.283m (2015: £1.012m) attributable to the investment property portfolio, gave rise to an overall deficit of £1.012m (2015: surplus £1.015m). This reflects the owner occupied portfolio valuation deficit of £1.295m (2015: surplus: £0.003m) due to more challenging trading conditions for the Marina at Sutton Harbour with general valuation sentiment towards marina assets impacting King Point Marina. The Fisheries valuation was unchanged and car parks showed a surplus in the six-month period since the previous external valuation.

 

Net debt (comprising net bank debt and outstanding finance leases) at 30 September 2016 increased slightly in the period to £22.737m from £22.213m at 31 March 2016. The increase in debt reflects investment into regeneration projects and also the annual cash cycle. This peaks in March annually when rents and marinas fees paid in advance are received. Gearing stood at 56.8% at 30 September 2016, up from 54.4% at 31 March 2016.

 

The Board does not recommend the payment of an interim dividend.

 

Marine Businesses

Plymouth Fisheries at Sutton Harbour has traded well in the first half with landings in line with the same period last year. Trading so far in the second half year continues to be encouraging. Following the completion of the ice plant and chill chain upgrades the Group plans further investment alongside proposed grant funding to ensure Plymouth Fisheries retains its market leading position.

 

The Marina at Sutton Harbour hosted the start of the Transat race in April 2016 and other events in the summer season. The Group continues to invest in improved facilities for berth holders such as WiFi connectivity at both marinas. Occupancy at King Point Marina continues to grow and additional pontoons will shortly be installed to extend berthing space. The Marina at Sutton Harbour has experienced a modest drop in occupancy and a plan has been put in place in response.

 

Real Estate

At the start of the year four tenants served notice resulting in occupancy falling to 87%. The vacant premises are being marketed with negotiations in progress for the first new occupation expected early in the New Year. A number of rent reviews for existing tenancies are currently underway and are expected to result in an overall rental uplift.

 

Car Parking

The car parks showed strong revenue growth during the summer season. Further improvements to overall presentation and signage will take place over the winter months, following the success of the new and efficient LED lighting installation.

 

Regeneration

An update on the major regeneration projects currently being promoted is as follows:

 

Former Airport Site

The final Department for Transport Review of the viability of re-opening the former Plymouth Airport is still awaited and the Group will update investors as soon as it is available. The case for alternative uses for the site to create much needed homes, jobs and first class community sports facilities in conjunction with a significant infrastructure upgrade to the University of St Mark and St John is compelling and clearly in the best interests of the people of Plymouth. The Plymouth and South West Devon Joint Local Plan will be subject to an independent Government Inspector's scrutiny at the 'Examination in Public' ("EiP") currently scheduled for Autumn 2017. The Group's case for justifying alternative use of the former airport site will set out clearly before the independent inspector at the EiP.

 

The Group has freehold and long leasehold legal interests at the site and shareholders can be confident that the Board remains determined to realise the optimum value from this strategic asset.

 

Sugar House, East Quay

The Group is actively marketing the site to potential joint venture partners for the development of a residential led scheme together with the potential for car parking, retail, restaurant and student accommodation.

 

 

'The Boardwalk' at Vauxhall Quay

Following the success in achieving detailed planning permission for 'The Boardwalk' scheme, a pier-like structure arranged as two large restaurant units and a small pavilion unit totalling approximately 7,800 sq ft (724.3m2), the Group is still awaiting final consents from the Marine Management Organisation which it anticipates will be forthcoming during the early part of 2017. Strong interest remains from potential tenants on a pre-let basis.

 

Outlook

 

The Board has continued to work with its advisers, Rothschild, on the Strategic Review of Options for the future of the Group. The process remains ongoing and the Board will update shareholders in due course.

 

The Group has clear priorities: to pursue vigorously the planning allocation for the Former Airport Site, to accelerate the progress of other regeneration projects and to grow revenue and profits at the marine businesses and from the investment property portfolio.

 

 

 

 

Graham S Miller                                 Jason W H Schofield

Chairman                                             Chief Executive

 

15 December 2016


 

Consolidated Statement of Comprehensive Income

 

 

 

 

Note

6 months to

30 September

2016

(unaudited)

£000

6 months to

30 September

2015

(unaudited)

£000

Year Ended

31 March

2016

(audited)

£000



Revenue

3

3,633

3,674

6,509






Cost of sales before impairment of assets


(2,120)

(2,209)

(3,960)

Impairment of assets


(553)

-

(272)

Cost of Sales


(2,673)

(2,209)

(4,232)






Gross Profit


960

1,465

2,277






Administrative expenses





Fair value adjustment on investment property


283

1,012

1,452






Administrative expenses


(770)

(664)

(1,082)

 

Operating profit from continuing operations

 

3

 

473

 

1,813






Financial income


-

-

2

Financial expense


(511)

(552)

(1,059)






Net financing costs


(511)

(552)

(1,057)











(Loss)/profit before tax from continuing operations

3

(38)

1,261

1,590

Taxation credit/(charge) on profit from continuing operations

4

7

(252)

(93)






(Loss)/profit from continuing operations


(31)

1,009

1,497









Basic (loss)/earnings per share

6

(0.03)p

1.05p

0.68p






Diluted (loss)/earnings per share

6

(0.03)p

1.05p

0.68p

 

 

                        



6 months to

30 September

2016

(unaudited)

£000

6 months to

30 September

2015

(unaudited)

£000

Year Ended

31 March

2016

(audited)

£000




(Loss)/profit from continuing operations


(31)

1,009

1,497





Other comprehensive (expense)/income




Continuing operations:





   Revaluation of property, plant and equipment


(742)

3

(1,167)

   Deferred taxation on income and expenses recognised directly in the       consolidated statement of comprehensive income


 

-

 

-

 

-

   Effective portion of changes in fair value of cash flow hedges


(71)

59

80






Total other comprehensive (expense)/income


(813)

62

(1,087)

Total comprehensive (expense)/ income for the period attributable to equity shareholders


 

(844)

 

1,071

 

410


 

Consolidated Balance Sheet

 

 

 

 

Note

As at

30 September

2016

(unaudited)

£000

As at

30 September

2015

(unaudited)

£000

As at

31 March

2016

(audited)

£000




Non-current assets





Property, plant and equipment

7

26,153

28,741

27,295

Investment property

7

19,460

18,530

19,350



45,613

47,271

46,645




Current assets





Inventories


20,389

20,012

20,097

Trade and other receivables


1,781

1,645

2,038

Cash and cash equivalents

8

123

154

686

Tax recoverable


37

26

19



22,330

21,837

22,840




Total assets

3

67,943

69,108

69,485






Current liabilities





Other interest-bearing loans and borrowings


-

-

-

Trade and other payables


1,010

1,126

1,118

Finance lease liabilities


100

103

105

Deferred income


979

981

1,542

Provisions

9

26

44

53

Derivative financial instruments


-

-

33



2,115

2,254

2,851




Non-current liabilities





Other interest-bearing loans and borrowings


22,500

21,960

22,500

Finance lease liabilities


260

347

294

Deferred government grants


1,193

1,018

1,214

Deferred tax liabilities


1,622

1,789

1,629

Provisions

9

84

116

88

Derivative financial instruments


144

94

40



25,803

25,324

25,765






Total liabilities

3

27,918

27,578

28,616




Net assets


40,025

41,530

40,869




Issued capital and reserves attributable to owners of the parent





Share capital                           


16,069

16,069

16,069

Share premium


5,368

5,368

5,368

Other reserves


12,638

14,600

13,451

Retained earnings


5,950

5,493

5,981

Total equity


40,025

41,530

40,869


 

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 2015

16,069

5,368

10,820

3,871

(153)

4,484

40,459

 

Comprehensive income/(expense)








 

Profit for the period

-

-

-

-

-

1,009

1,009

 

Other comprehensive income/(expense)








 

Revaluation of property, plant and equipment

-

-

3

-

-

-

3

 

Effective portion of changes in fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

59

 

-

 

59

 

Total other comprehensive income/(expense)  - period ended 30 September 2015

 

-

 

-

 

3

 

-

 

59

 

-

 

62

 

Total comprehensive income/(expense) - period ended 30 September 2015

 

-

 

-

 

3

 

-

 

59

 

1,009

 

1,071

 

Balance at 30 September 2015

16,069

5,368

10,823

3,871

(94)

5,493

41,530

 

Balance at 1 October 2015

16,069

5,368

10,823

3,871

(94)

5,493

41,530

 

Comprehensive income/(expense)








 

Profit for the period

-

-

-

-

-

488

488

 

Other comprehensive income/(expense)








 

Revaluation of property, plant and equipment

-

-

(1,170)

-

-

-

(1,170)

 

Effective portion of changes in fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

21

 

-

 

21

 

Total other comprehensive income/(expense)  - period ended 31 March 2016

 

-

 

-

 

(1,170)

 

-

 

21

 

-

 

(1,149)

 

Total comprehensive income/(expense) - period ended 31 March 2016

 

-

 

-

 

(1,170)

 

-

 

21

 

488

 

(661)

 

Balance at 31 March 2016

16,069

5,368

9,653

3,871

(73)

5,981

40,869

 

Balance at 1 April 2016

16,069

5,368

9,653

3,871

(73)

5,981

40,869

 

Comprehensive income/(expense)








 

Loss for the period

-

-

-

-

-

(31)

(31)

 

Other comprehensive income/(expense)








 

Revaluation of property, plant and equipment

-

-

(742)

-

-

-

(742)

 

Effective portion of changes in fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

(71)

 

-

 

(71)

 

Total other comprehensive income/(expense)  - period ended 30 September 2016

 

-

 

-

 

(742)

 

-

 

(71)

 

-

 

(813)

 

Total comprehensive income/(expense) - period ended 30 September 2016

 

-

 

-

 

(742)

 

-

 

(71)

 

(31)

 

(844)

 

As at 30 September 2016

16,069

5,368

8,911

3,871

(144)

5,950

40,025

 

 


 

Consolidated Cash Flow Statement

Note

6 months to

30 September

2016

(unaudited)

£000

6 months to

30 September

2015

(unaudited)

£000

Year Ended

31 March

2016

(audited)

£000

 

Cash generated from continuing operating activities

 

10

 

99

 

17

 

621

 

Cash generated from total operating activities


 

99

 

17

 

621

 

Tax received


 

-

 

-

 

-

Net cash generated from operating activities


 

99

 

17

 

621






Cash flows from investing activities





Proceeds from sale of property, plant and equipment


-

-

-

Net expenditure on investment property


-

(5)

(8)

Expenditure on property, plant and equipment


(111)

(292)

(561)

Interest received




2

Net cash used in investing activities


 

(111)

 

(297)

 

(567)






Cash flows from financing activities





Interest paid


(512)

(553)

(1,059)

Loan drawdowns/(repayment of borrowings)


-

310

850

Net finance lease (payments)/receipts


(39)

403

353

Proceeds of government grants


-

35

249

Net cash generated from financing activities


 

(551)

 

195

 

393

 

Net (decrease)/increase in cash and cash equivalents


 

(563)

 

(85)

 

447

 

Cash and cash equivalents at beginning of period


 

686

 

239

 

239

 

Cash and cash equivalents at end of period

 

8

 

123

 

154

 

686

 


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 2016 were approved by the Board of Directors on 27 June 2016 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 2016, 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 2016, as described in those annual financial statements.

Adoption of new International Financial Reporting Standards

The following new standards, amendments to standards or interpretations have been issued, but are not effective for the financial year beginning 1 April 2016 and have not been adopted early:

 

IFRS 15 Revenue from Contracts with Customers: *1 January 2018

IFRS 9 Financial Instruments: * 1 January 2018

 

* mandatory effective date is periods commencing on or after

 

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.

The only significant change to estimates and judgements since the signing of the financial statements for the year ended 31 March 2016 is that King point Marina is now carried at an independent external valuation rather than its value in use.



 

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 having 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 2016 is as follows:

 

 

6 months to 30 September 2016

Marine

Real Estate

Car Parking

Regeneration

Total


£000

£000

£000

£000

£000

Revenue

2,529

808

296

-

3,633







Gross profit prior to non-recurring items

761

628

180

(56)

1,513

Non-recurring items:






Impairment of assets

(553)

-

-

-

(553)

Segmental Operating Profit before Fair value adjustment and unallocated expenses

208

628

180

(56)

960

Fair value adjustment on investment properties and fixed assets

-

111

172

-

283












1,243

Unallocated:






Administrative expenses





(770)

Operating profit from continuing operations





473













Financial income





-

Financial expense





(511)

Loss before tax from continuing operations





(38)

Taxation





7

Loss for the year from continuing operations





(31)







Depreciation charge






Marine





142

Real Estate





-

Car Parking





3

Regeneration





-

Administration





16






161

 



 

3.  Segment Information (continued)

 

 

6 months to 30 September 2015

Marine

Real Estate

Car Parking

Regeneration

Total


£000

£000

£000

£000

£000

Revenue

2,617

778

279

-

3,674







Gross profit prior to non-recurring items

742

616

171

(64)

1,465

Non-recurring items:






Impairment of assets, onerous leases

-

-

-

-

-

Segmental Operating Profit before Fair value adjustment and unallocated expenses

742

616

171

(64)

1,465

Fair value adjustment on investment properties and fixed assets

-

1,012

-

-

1,012












2,477

Unallocated:






Administrative expenses





(664)

Operating profit from continuing operations





1,813













Financial income





-

Financial expense





(552)

Profit before tax from continuing operations





1,261

Taxation





(252)

Profit for the year from continuing operations





1,009







Depreciation charge






Marine





112

Real Estate





-

Car Parking





3

Regeneration





-

Administration





8






123

 



 

3.  Segment Information (continued)

 

 

Year ended 31 March 2016

Marine

Real Estate

Car Parking

Regeneration

Total


£000

£000

£000

£000

£000

Revenue

4,449

1,580

480

-

6,509







Gross profit prior to non-recurring items

1,255

1,196

276

(178)

2,549

Non-recurring items:






Impairment of assets

-

-

-

(272)

(272)

Segmental Operating Profit before Fair value adjustment and unallocated expenses

1,255

1,196

276

(450)

2,277

Fair value adjustment on investment properties and fixed assets

(229)

1,829

(148)

-

1,452












3,729

Unallocated:






Administrative expenses





(1,082)

Operating profit from continuing operations





2,647













Financial income





2

Financial expense





(1,059)

Profit before tax from continuing operations





1,590

Taxation





(93)

Profit for the year from continuing operations





1,497







Depreciation charge






Marine





231

Real estate





-

Car Parking





6

Regeneration





-

Administration





36






273

 

 


30 September 2016

30 September 2015

31 March 2016


£000

£000

£000

Segment assets:




Marine

22,591

25,623

24,312

Real estate

20,106

19,103

20,014

Car Parking

3,995

3,652

3,620

Regeneration

20,506

20,116

20,207

Total segment assets

67,198

68,494

68,153

Unallocated assets:




Property, plant and equipment

107

131

121

Trade & other receivables

515

329

525

Cash & cash equivalents

123

154

686

Total assets

67,943

69,108

69,485

 



 

3.  Segment Information (continued)

 


30 September 2016

30 September 2015

31 March 2016


£000

£000

£000

Segment liabilities:




Marine

2,128

1,575

2,329

Real estate

387

609

622

Car Parking

64

39

78

Regeneration

843

846

825

Total segment liabilities

3,422

3,069

3,854

Unallocated liabilities:




Bank overdraft & borrowings

22,500

22,410

22,500

Trade & other payables

230

215

560

Financial Derivatives

144

94

73

Tax payable

-

1

-

Deferred tax liabilities

1,622

1,789

1,629

Total liabilities

27,918

27,578

28,616

 

 

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. Taxation

 

The Company has applied an effective tax rate of 20% (2015: 20%) based on management's best estimate of the tax rate expected for the full financial year and is reflected in a movement in deferred tax.

 

5. Dividends

 

The Board of Directors do not propose an interim dividend (2015: nil).

 

 

6. Earnings per share

 


6 months to

30 September

2016

(unaudited)

pence

6 months to

30 September

2015

(unaudited)

pence

Year Ended

31 March

2016

(audited)

pence

Continuing operations




Basic earnings per share

(0.03)

1.05

1.55

Diluted earnings per share*

(0.03)

1.05

1.55





 

Basic Earnings per Share:

Basic earnings per share have been calculated using the loss for the period of £31,000 (2015: profit £1,009,000, year ended 31 March 2016 profit £1,497,000). The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 96,277,086 (2015: 96,277,086; year ended 31 March 2016: 96,277,086) has been used in our calculation.

 

Diluted Earnings per Share:

Diluted earnings per share uses an average number of 96,277,086 (2015: 96,277,086; year ended 31 March 20156 96,277,086) ordinary shares in issue, and takes account of the outstanding options under the SAYE scheme in accordance with IAS 33 'Earnings per share'.

 

* For the 6 months ended 30 September 2016, the year ended 31 March 2016, and the 6 months ended 30 September 2015, 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.

 

7. Property valuation

Freehold land and buildings and investment property have been independently valued by Jones Lang LaSalle as at 30 September 2016, in accordance with the Practice Statements in the Valuations Standards (The Red Book) published by the Royal Institution of Chartered Surveyors. 

 

A further valuation will be commissioned for the year ending 31 March 2017, as in previous years.

8. Cash and cash equivalents


As at

30 September 2016

(unaudited)

£000

As at

30 September 2015

(unaudited)

£000

As at

31 March 2016

(audited)

£000





Cash and cash equivalents per balance sheet and cash flow statement

123

154

686

 

9. Provisions

 

 


Onerous leases

Total


£000

£000




Balance at 1 April 2015

177

177

Provisions made during the year

-

-

Provisions utilised during the year

(17)

(17)

Balance at 30 September 2015

160

160




Provisions made during the year

-

-

Provisions utilised during the year

(19)

(19)

Balance at 31 March 2016

141

141




Provisions made during the year

-

-

Provisions utilised during the year

(31)

(31)

Balance at 30 September 2016

110

110




Current

26

26

Non-current

84

84


110

110

 



 

 

10. Cash flow statements

 


6 months to

30 September 2016

(unaudited)

£000

6 months to

30 September 2015

(unaudited)

£000

Year Ended

31 March 2016

(audited)

£000

Cash flows from operating activities



 

(Loss)/profit for the period

(31)

1,009

1,497

Adjustments for:




Taxation

(7)

252

93

Financial income

-

-

(2)

Financial expense

511

552

1,009

Fair value adjustments on owner occupied and investment property

(111)

(1,012)

(1,829)

Revaluation of property, plant and equipment

(172)

-

377

Depreciation

161

123

273

Amortisation of grants

(23)

(8)

(29)

Impairment of development property

553

-

66

Loss on sale of property, plant and equipment

11

-

6

Cash generated from operations before changes in working capital and provisions

 

892

 

916

 

1,461

Increase in inventories

(332)

(118)

(202)

Decrease/(increase) in trade and other receivables

240

(126)

(514)

Decrease in trade and other payables

(107)

(115)

(126)

(Decrease)/increase in deferred income

(563)

(523)

38

Decrease in provisions

(31)

(17)

(36)





Cash generated from operations

99

17

621

 

 

11.  Capital Commitments

 

At 30 September 2016 the Group has no capital commitments.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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