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LONDON (Alliance News) - Trafalgar New Homes PLC Thursday said it swung to a loss in its last financial year, as it booked costs for moving its listing to AIM from the ISDX Growth Market, and was hit by the liquidation of a contractor and development site delays.
The company, which operates in Kent and the South East of England, posted a pretax loss of GBP305,049 for the year to March 31, compared with a GBP617,976 profit a year earlier. The company, which moved to AIM in July last year in an attempt to increase its profile and prospects for raising capital funding, booked costs of GBP250,653 for that move.
Revenue rose to GBP3.4 million, from GBP2.2 million, but Trafalgar described the year as "disappointing".
It had expected to complete the construction and sale of its flagship site at Oakhurt Park Garden, Kent. The site consists of 12 houses, and is expected to generate revenue of no less than GBP6.5 million and a substantial profit.
In the event, the company had sold only four of the houses as at the year-end, which contributed only around GBP186,000 towards the profits for the year. Trafalgar blamed the failure to sell the other units on delays in the construction programme, the liquidation of the contractor undertaking the work and planning delays.
As a result, the company incurred an increase in the cost of financing the site due to having to re-finance because of the delays beyond the date of the expiry of the funding arrangement that was in place. This re-financing was successfully concluded, but the increased cost reduced the potential profitability of the site yet further, Trafalgar said.
The company said that despite the contribution to profit made by the sale of the remaining units on its Edenbridge site, the fact that only four of the houses at Oakhurst Park Gardens sold by the year-end resulted in the company only being able to declare a small profit overall from its development activities.
Trafalgar said it has sold five more houses on the Oakhurst Park Gardens site since the year eand and a further two are under offer. All the homes are now fully complete and landscaping and access road works are mostly finished, it said.
However, it said land costs are rising again and "we are not prepared to bid for sites which do not show a realistic return on capital employed."
Trafalgar New Homes shares were down 4.0% at 1.80 pence Thursday afternoon.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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