4 Dec 2009 07:00
ABBEY PLC
Interim Statement for the Six Months Ended 31 October 2009
The Board of Abbey plc reports a profit before taxation of €3.60m which compares with a loss of €5.39m for the corresponding period last year. Profits at the operating level were €2.49m as compared to €5.88m loss at the half way stage last year.
Our housebuilding division completed 222 sales (UK 170; Ireland 49; Czech Republic 3) with a turnover of €36.27m resulting in an operating profit of €2.54m. Market conditions in England steadily improved over the period. We have entered the second half with a good level of forward sales. In Ireland we have enjoyed considerable success in clearing inventory. The second half has continued in the same vein and sales are being made at a steady rate. In Prague sales are slow. We continue to experience delays with likely cost implications on our project in Slivenec. Progress is gradual. Our project in Andel is off to a good start and the contractor here is currently on time. Overall the outlook for the second half is as usual very dependent on the strength or otherwise of the spring market, however, we are hopeful that a higher level of completions than that achieved in the first half will be attainable.
M & J Engineers, our UK plant hire business, generated operating losses of €395,000 on a turnover of €5.15m. In addition a gain of €89,000 resulted from the disposal of an M&J property. These figures are disappointing and no early improvement is likely. A further substantial loss is expected in the second half. The business remains cash positive and our capital employed is steadily declining.
Rental income for the period amounted to €252,000 for the half year.
The Group enjoyed good cash flow during the period and held €41.10m in cash and restricted cash together with €51.79m in UK and Irish government debt at the end of October. It is the Group's intention to invest these funds in fresh development opportunities as circumstances allow. During the reporting period no land purchase was entered into or completed. Since the balance sheet date a site for 60 plots in Cambridgeshire with planning permission has been purchased. Further land purchases have been agreed subject to contract.
Prospects for the Group continue to be dull. Although we expect modest profitability this year we cannot yet rule out the possibility of further stock losses in our Irish operations. Looking further ahead progress relies on successful restocking of our land bank and this seems likely to be a slow and difficult process. Many observers expect another significant reversal in the English housing market as UK authorities get to grips with their budget deficit after the general election. Whilst we are confident that low inventory will continue to provide some support to the UK market it seems common ground that profits and growth will be hard won for the foreseeable future. The Group's strong financial position allows us to move quickly to avail of any good opportunities.
Shareholders should carefully note the exchange rates used for this statement. The income statement uses the average exchange rate for the period of 100 cents: STG87.92p and 100 cents: CZK 2,595.87h. The balance sheet uses the rate prevailing on 31 October of 100 cents: STG 89.54p and 100 cents: CZK 2,651.90h.
Copies of this statement are available to shareholders and members of the public at the company's registered office, 25\28 North Wall Quay, Dublin 1.
On behalf of the Board
Charles H Gallagher - Chairman
4th December 2009
The Interim Results for the six months ended to 31 October 2009 can be accessed by clicking on the following link:
http://www.rns-pdf.londonstockexchange.com/rns/5781D_-2009-12-3.pdf