Interim Results - 6 Months to 30 September 1999
Artisan (UK) PLC
11 November 1999
ARTISAN (UK) PLC
AIM
(Commercial and Leisure Industry Contractor)
PRELIMINARY RESULTS FOR THE 6 MONTH PERIOD
TO
30 SEPTEMBER 1999-11-10
KEY POINTS:
Turnover increased to £15.48m (10.46) UP 46%
Pre-tax profit increased to £2.081m (0.673) UP 226%
EPS at 30.0.99 1.6p
DIVIDEND 0.20p per share
Commenting on the results, Stephen Dean said 'I am extremely pleased with
the progress the group has made in terms of organic growth, although this is
not reflected in the market perception of the construction industry. We are
based in an area that is experiencing a strong demand for housing as
well as industrial developments and I see no reason why this should not continue
through 2000'.
Enquiries:
Artisan (UK) plc 01480 436666
Stephen Dean, Chairman Mobile 0385 938 782
Seymour Pierce Ltd. 0171 648 8700
Richard Feigen/Sarah Wharry
Boswell City Financial PR Ltd. 0171 583 2001
Glenda Boswell Mobile 0468 235 725
ARTISAN (UK) Plc
INTERIM STATEMENT
The period under review has seen significant development of our
trading subsidiaries both organically and by acquisition with the addition of
Joseph Driver Building Limited and a 50% stake in Living Heritage Holdings
Limited, to the Group.
The Group trading has continued to expand with turnover up 48% and profit
before tax 226%. At the period end the Group had net cash balances of
1,895,934. Also at the period end the Group had Bank and short-term
borrowings of 1,978,781, representing a gearing ratio of 12.2% reduced from
63% at the year end.
The Open Offer announced in July 1999 was well supported by shareholders
and resulted in 55,844,877 shares being placed at 6p representing a take up
of 73.38%.
The Board intends to pay an interim dividend of 0.20p per share. The
dividend will be paid on 29 February 2000 to all shareholders on the
register at 26 November 1999.
SPEYMILL CONTRACTS LIMITED:
The first six months has seen a continuation of the good results achieved
last year. In keeping with its strategy to increase its client base
geographically, Speymill have opened a new regional office in Leeds sourcing
work in and around northern England.
The leisure industry is buoyant and despite changes within the industry,
most notably Allied Domecq, Greenalls and Greene King. These changes
particularly in respect of Allied Domecq , will bring about substantial work
in re-branding public houses.
Speymill have continued to provide clients with a quality product on time and
to the required standards which has continued to enhance relationships with
repeat business.
Most notably this is with the Old Monk Pub Company where we have
completed projects at Horseferry Road and Middlesex Street in London, Rotherham,
Leeds and a new concept, Springbok Bar also at Leeds. Yates's Wine Lodge
continue to provide Speymill with repeat business with three projects on site at
the moment in Aylesbury, Grantham and Harlow.
Speymill also continues to work with national breweries and currently has
two large Rat and Parrot concepts for Scottish and Newcastle at Milton Keynes
and Cambridge. Additionally Speymill completed the new Edwards concept for Bass
at Romford, as well as continuing to work with Charles Wells, Pizza Express and
De Vere Hotels.
New clients for Speymill include Luminar Leisure, following the
successful completion of the Chicago Rock Cafe at Maidstone. The refurbishment
of Legends Nightclub, Mayfair and a new members only club, Abigail's Party,
both for Perthshire Leisure Plc. together with two Bar Med projects for Surrey
Free Inns at Manchester and Liverpool, are additions to Speymill's clients.
BERNARD WARD LIMITED:
The first six months have seen the continued development and expansion
of Bernard Ward with turnover up to £1.9 million for the six months. Part of
this continued development is increasing the client awareness of the projects
that Bernard Ward are capable of undertaking up to a value of £1.5 million.
Bernard Ward continues to carry out the all-important small jobs and is
equally comfortable carrying out jobs to the value of £20,000 and applies
the same management expertise. Bernard Ward continues to operate in and
around Peterborough but its planned expansion will target works in and
around Cambridge. Bernard Ward maintains a wide and varied workload including
a new extension to Milton Golf Club, classroom extensions to Wistow
School, alterations at Oundle School, extension at Deacon School Peterborough
and works at Comberton Village College. This workload includes a new office
block for Camrascan, six new build flats at St Neots and an industrial
building at Whittlesey.
Being on approved lists for Peterborough City Council, Lincolnshire
County Council, Cambridgeshire County Council, Northants County Council as well
as the National Health Trust and other authorities within the region,
Bernard Ward continues to have numerous opportunities for work. This division
will continue with its planned expansion as well as maintaining its
longstanding reputation for providing quality products on time to the desired
standard.
JOSEPH DRIVER BUILDING LIMITED:
Artisan acquired an 84% holding in Joseph Driver Building Limited in
August 1999 and the company exercised its option on 27 October 1999 to
acquire the remaining 16%. The business was formed some 40 years ago as
a regional contractor based in Tring, Hertfordshire and the acquisition
further endorses the Boards' strategy of building a regional network of
both general and specialist contractors.
Established in 1966, Joseph Driver Building Limited carry out a broad
spectrum of building works ranging from projects with local authorities for
schools, N.H.S. Trusts, residential works for housing associations and private
clients and their own residential developments.
The versatility of Joseph Driver Building Limited includes working on
projects ranging from £150,000 to £2.5 million with refurbishments/conversions,
new build or design and build.
Currently, Joseph Driver Building Limited are working on a variety of projects
which include:
1. New classroom block at Letchworth for Hertfordshire County Council.
2. Design and build thirty-six houses at Hemel Hempstead.
3. New build seven house development in Rickmansworth.
4. Conversion at Coppersworth Hospital for N.H.S. Trust.
5. Six house residential development in Northamptonshire.
Joseph Driver Building Limited have a wealth of experience and it is
the intention to build on this expertise, to move the company forward, to build
from this sound base.
DEAN COMMERCIAL DEVELOPMENTS/DEAN HOMES LIMITED:
The emphasis on the company's development programme has concentrated on
its three commercial business parks in St Neots, Godmanchester and
Peterborough, Cambridgeshire. During the period the company sold its entire
long leasehold interest in Cardinal Park, Godmanchester to Guardian Properties,
a subsidiary of Guardian Assurance and also entered a build contract and profit
share agreement.
The anticipated reversionary value of the scheme is £5.47m with a yield of 8%
in which Dean Commercial has a 40% share.
Five of the twelve distribution units on the site are complete with the
balance due for completion in the latter part of this financial year and
early next financial year.
The company has under construction a bespoke electronics factory on the St
Neots Park for Prosol Electronics which is due to be completed by mid December.
Several speculative units and the entire road and services infrastructure
are under construction, and enquiries for both leasehold and freehold interest
on the site remain at an encouraging level.
The company has currently three residential sites under construction
in association with other developers and has three sites on its own account.
All the sites concentrate on the Cambridgeshire area, along the M11, A14 and
A1 corridor where housing demand remains very strong.
Substantial investment has been made by Dean Homes Limited as joint
venture partner to Living Heritage Holdings Limited in its developments in
Haywards Heath, Warwick, Camptonbury and Shenley.
LIVING HERITAGE HOLDINGS LIMITED:
In July this year Artisan (UK) Plc acquired a 50% stake in Living
Heritage Holdings Limited. Under the terms of the transaction, Artisan (UK) Plc
has an option over the remaining 50% equity interest and also a priority
profit share in the profit of Living Heritage Holdings Limited.
The company has made a 1st stage payment of £300,000, together with a
working capital loan of £850,000, repayable in part by next March.
The full consideration is payable in three years' time dependent upon the
annualised post tax profits for the 27 months to 31 March 2002.
Living Heritage mainly operates in the northern Home Counties of Hertfordshsire,
Buckinghamshire and Bedfordshire. Primarily its developments are historic
buildings and outbuildings (barns). Additionally it seeks to exploit the market
by obtaining planning permission to develop the grounds with sympathetically
designed residences. Living Heritage Holdings Limited currently has five sites
under construction in Haywards Heath, Warwick, Redbourne, Shenley and
Camptonbury.
Based in Malvern, Worcestershire the business is well placed to expend the
mid-western side of the country in Gloucestershire, Oxfordshire and
Warwickshire.
CURRENT PROSPECTS:
Artisan's construction industry activities are currently buoyant,
with development books and enquires at good levels throughout the Group.
The residential and commercial businesses are also experiencing strong demand
and, subject to any radical change in interest rates, appear to be on course
for continued activity through 2000.
The Company has recently agreed to acquire two property investment businesses
mainly for shares and once the properties are sold will substantially enhance
the Company's balance sheet and working capital surpluses. The likely increase
in shareholder funds and eventually cash is expected to be in the order of
£2,100,000. Both share placings will be done at levels substantially above the
July open offer price and reflect the current share price.
The Board remains confident that the current trading prospects for
its subsidiaries remains good.
FUTURE STRATEGY:
Your Board continues to explore opportunities of increasing shareholder
value, either by merger, or acquisition within the Group's current business
sector.
Notwithstanding the recent share price movements, your Board continues to
be concerned that along with other smaller quoted construction companies,
the investment markets rating of your businesses remains low.
It has, therefore, decided to evaluate other more highly rated market
sectors, which may provide better returns for shareholders. No firm decision
would be taken without the prior approval of shareholders.
Following a reduction in the shareholding of Rosenoble Limited, Mr Graham
Robeson will retire as non-executive director, as at 9 November 1999. The
board will be seeking a suitable replacement to join the Board when appropriate.
Finally, I take this opportunity to thank the management and staff of
the Company for their commitment and continuing loyal support.
In conclusion, your Board believes that a satisfactory year is in prospect.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six months Six months Fifteen
ended ended months
30 September 30 ended
1999 September 31 March
(Unaudited) 1998 1999
(Unaudited) (Audited)
Turnover
Existing operations 14,215,261 10,455,605 27,160,625
Acquisitions 1,260,559 - 1,188,095
15,475,820 10,455,605 28,348,720
Operating profit
Existing operations 1,697,845 672,666 1,456,456
Acquisitions 131,312 - 18,265
1,829,157 672,666 1,474,721
Other income 292,899 - -
Interest (41,277) (34,103) (100,890)
Profit on ordinary 2,080,779 638,563 1,373,831
activities before
taxation
Taxation (644,172) (197,955) (459,031)
Profit on ordinary 1,436,607 440,608 914,800
activities after taxation
Dividends (283,261) - (991,213)
Retained profit 1,153,346 440,608 76,413
Earnings per share 1.57p 1.30
Fully diluted 1.53p 1.27
Dividend per share 0.20p
CONSOLIDATED BALANCE SHEET
As at As at As at
30 September 30 31 March
1999 September 1999
(Unaudited) 1998 (Audited)
(Unaudited)
Fixed assets
Tangible fixed assets 888,339 140,410 338,953
Intangible fixed assets 1,309,174 12,000 117,358
2,197,513 152,410 456,311
Current assets
Investments 226,875 - 411,634
Stocks 6,512,035 2,113,644 2,928,893
Debtors 7,780,483 4,283,247 5,432,798
Cash at bank and in hand 1,188,834 - 677,776
15,708,227 6,396,891 9,451,101
Creditors
Amounts falling due (8,610,607) (4,861,315) (6,177,816)
within one year
Net current assets 7,097,620 1,535,576 3,273,285
Total assets less current 9,295,133 1,687,986 3,729,596
liabilities
Creditors
Amounts falling due after 2,801,901 776,811 1,906,837
more than one year
Net Assets 6,493,232 911,175 1,822,759
Capital reserves
Called up share capital 704,753 346,619 379,119
Share premium account 3,418,178 - 219,685
Other reserves 1,027,127 (146,519) 1,034,127
Profit and loss account 1,343,174 711,075 189,828
Equity shareholders funds 6,493,232 911,175 1,822,759
CONSOLIDATED CASH FLOW
Six months Fifteen
ended months
30 ended
September 31 March
1999 1998
(Unaudited) (Audited)
Net cash (outflow) from operating (2,363,336) (339,687)
activities
Returns on investments and
servicing
Other income 292,899 124,260
Interest paid (41,277) (225,150)
Net cash inflow (outflow) from
returns on
investments and servicing of 251,622 (100,890)
finance
Taxation
UK Corporation tax paid (65,135) (431,341)
Capital expenditure and financial
investment
Sale of tangible fixed assets - 136,170
Purchase of tangible fixed assets (98,652) (172,457)
Net cash (outflow) from investing (98,652) (36,287)
activities
Acquisitions and disposals
Purchase of subsidiary undertakings 1,578,789 (248,870)
Cash acquired with subsidiary (146,694) 175,391
undertaking
Net cash (outflow) from (1,432,095) (73,479)
Acquisitions and disposals
Equity dividends paid (291,633) (1,299,580)
Net cash inflow/(outflow) before (3,999,229) (2,281,264)
financing
Financing
Issue of shares net of costs 3,524,127 1,432,831
Additions to borrowing 900,000 1,000,000
Capital element of finance leases 86,160 (83,964)
Net cash inflow from financing 4,510,287 2,348,867
Increase in cash and cash 511,058 67,603
equivalents
NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of Operating profit to net cash inflow from operating
activities:
Six months Fifteen
ended months
30 year ended
September 31 March
1999 1999
(Unaudited) (Audited)
Operating profit 1,829,157 1,474,721
Depreciation 57,439 65,352
Amortisation of goodwill 19,612 -
Profit on sale of tangible fixed - (6,109)
assets
(Increase) in debtors 2,531,897 1,848,996
(Increase) in stocks 2,945,781 1,269,751
Increase in creditors 1,023,375 1,656,730
Increase in investments 184,759 (411,634)
Net Cash (Increase)/(Outflow) from (2,363,336) (339,687)
operating activities
(b) Reconciliation of net cash flow to movement in net debt:
Six months Fifteen
ended months
30 year ended
September 31 March
1999 1999
(Unaudited) (Audited)
Increase/(decrease) in cash 511,058 67,603
Cash inflow from increase in debt (986,160) (1,095,434)
and lease financing
Change in net debt resulting from (475,102) (1,027,831)
cash flows
Opening net (debt)/funds (474,716) 553,115
Closing net (debt) (949,818) (474,716)
(c) Analysis of net cash and debt:
At Cash At
31 March Flow 30
1999 September
1999
NET CASH £ £ £
Cash at bank 677,776 511,058 1,188,834
DEBT
Finance leases (152,492) (86,160) (238,652)
Debt due within one (139,875) (60,125) (200,000)
year
Debt due after more (860,125) (839,875) (1,700,000)
than one year
Net (debt) (474,716) (475,102) (949,818)
NOTES TO THE INTERIM STATEMENT
1. The interim financial information has been prepared on the basis of the
accounting policies set out in the Group's 1999 statutory accounts to
31 March 1999, including the adoption of merger accounting principles in
respect of Dean Homes Limited and Speymill Contracts Limited in accordance
with FRS6 accounting.
The comparisons for the six months to 30 September 1998 have been prepared
on a proforma basis. The interim figures have not been audited. The
interim financial statement does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985 (The 'Act').
Comparative financial information for the 15 months ended 31 March 1999
has been extracted from the statutory accounts for the period which
have been delivered to the registrar of Companies and upon which the
auditors gave an unqualified report, with no statement under Section
237(2) or (3) of the Act.
2. The taxation charge for the 6 months has been calculated at an effective
rate of 31% (1999 33%).
3. The calculation of earnings per share is based on the profit on ordinary
activities after taxation and 91,785,354 ordinary shares being the
weighted average number of shares in issue during the half year. The
weighted average number of shares in issue during the fifteen months ended
31 March 1999 was 70,366,647.
The calculation of fully diluted earnings per share is based on the
profit on ordinary activities after taxation and 93,965,354 ordinary
shares being the weighted average number of shares in issue during the
half-year, after allowing for share options.
4. The Directors have declared an interim dividend of 0.20p per share to
shareholders on the register at the close of business on 26th November
1999 which will be paid on 29th February 2000.
5. The interim statement was approved by the board of Directors on 11
November 1999. Copies of this statement will be available to members of
the public, free of charge, from the Company's registered office, Dean
House, The Anderson Centre, Spitfire Close, Ermine Business Park,
Huntingdon, Cambridgeshire, PE18 6XY.
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