14 Jul 2011 07:00
ABBEY PLC
Preliminary Statement for the year ended 30 April 2011
The Board of Abbey plc reports a profit of €11.5 million before taxation against a profit of €15.2 million in the previous year. After a tax charge of €3.3 million the Group made a profit of €8.2 million reflecting earnings per share of 34.11 cents. Group operating profits during the year were €9.4 million against profits of €12.8 million in the previous year. The result includes an impairment charge of €1.9 million against property land and work in progress arising mainly from the continuing difficult Irish market.
Dividends of 8 cents per share, absorbing €1.9 million were paid during the year. Further to the authority granted at the Extraordinary General Meeting on 17 November 2010 the company has purchased under the resolution granted 1,649,500 ordinary shares at a total cost of €8,515,000.
Our housebuilding operations completed 303 sales (UK 224; Ireland 58, CZK 21) with a turnover of €54.4 million generating an operating profit of €9.3 million. Trading in the UK was dull over the period with volumes in particular continuing to run at depressed levels. Margins have been supported by some keen prices for building work achieved over the past year. Market conditions continue to soften and there is no indication of any early improvement. The fall in disposable incomes being widely experienced together with the highly restrictive mortgage market is a significant constraint on house sales. In Ireland conditions remain very difficult and our main focus continues to be clearing inventory. Our popular development in Kilcoole, Co Wicklow has continued to sell well. There are clear signs that any significant improvement in credit conditions would likely lead to a healthy rebound in the housing market with wide benefit for the economy as a whole. In Prague we completed 21 sales and are able to report a second year of operating profit. Sales are still very slow in the city. The Prague market is set to be impaired by a proposed sharp increase to 14% (from 10%) in the level of VAT levied on new home sales from 1st January 2012 and a further planned increase to 17.5% in January 2013. Overall economic conditions remain tough for housebuilding in all our markets, however, we are now budgeting increasing turnover in this division as our restocking in England takes shape.
At the year end the Group owned and controlled land with the benefit of planning permission for the supply of 1,879 plots. Of these plots 786 were located in England. Since the year end a further 81 plots have been acquired in England. Terms have been agreed for further acquisitions and we expect to increase our UK land stocks this year.
M & J reported operating profits of €284,000 on a turnover of €11.8 million. In addition a gain of €410,000 arising from a property disposal was recognised during the year. Overall this was a good improvement from last year. Trading conditions remain difficult with debt collection a particular focus and concern. Turnover, however, is improving on a year on year basis and we are cautiously hopeful of further progress in the months ahead.
Rental income during the year was €449,000.
The Group benefits from strong liquidity and held €24.8 million in cash together with €52.6 million UK government bonds at the end of April.
The outlook for the year ahead is for more hard won progress. The restocking of our UK land bank, now underway, will be the key to our results in the foreseeable future. Increasing turnover will not necessarily be accompanied by increasing profits - at least in the short term as margins may be undermined by cost inflation and the fierce competition for immediately developable building land. However, in the absence of further bad news in the general economy a gradual steady return to normal trading in England is clearly in prospect.
The Board is pleased to recommend a dividend of 5 cents per share for approval at the Annual General Meeting.
Shareholders should carefully note the exchange rates used for this statement. The income statement uses the average exchange rate for the year of 100 cents:- STG 85.33p and 100 cents: CZK 24.80. The balance sheet uses the ratio prevailing on 30 April of 100 cents:- STG 89.04p and 100 cents: CZK 24.12.
The Preliminary Results financial statements for the year ended 30 April, 2011 can be accessed by clicking on the attached link
http://www.rns-pdf.londonstockexchange.com/rns/3510K_-2011-7-13.pdf
On behalf of the Board
CHARLES H GALLAGHER
CHAIRMAN
14 July 2011