Artisanal Sp.co Regulatory News (ART)

29 Nov 2005 07:00

Artisan (UK) PLC29 November 2005 29 November 2005 ARTISAN (UK) PLC UNAUDITED INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005 Artisan (UK) plc is an AIM listed company engaged in house building and commercial property development. Highlights •Operating profit before exceptional costs of £1.32m (2004: £0.95m) - an increase of 40% •Pre tax profit of £1.29m up 51%. (2004: £0.86m) •Earnings per share at 0.38 pence per share (2004: 0.24 pence per share) - up 58% •Net assets per share of 5.8p (2004: 5.1p) •Net debt reduced by 37% to £5.36m (2004: £8.48m) •Commercial trading continues revival •Increase in residential turnover •Court case over Bickerton Construction Ltd successfully concluded Michael W. Stevens, Chairman of Artisan (UK) plc commented, "I am very pleased that the management team has again delivered profit growth in both the residential and the commercial markets." "We are confident that the residential market retains strong fundamentals, despite its current volatility, and we will continue to invest in development land in line with our organic growth strategy." "Similarly, we intend to purchase further land for commercial development, both to replace stock traded and to be in a position to extend the range of our activity in that market." For further information please contact: Artisan (UK) plc: 01480 436666Chris Musselle, Chief Executive email@artisan-plc.co.uk Seymour Pierce, Nominated advisers 020 7107 8000Sarah Wharry Bankside Consultants,Financial PR advisers 020 7367 8888Simon Rothschild 07703 167065 Company website: www.artisan-plc.co.uk CHAIRMAN'S STATEMENTThe interim results for the six months to 30 September 2005 continue todemonstrate profit improvement despite difficult market conditions in thehousing market. This is a testament to the expertise of our people and theircontinuing focus on the core activities and matching customer demand. Rippon Homes has performed well by concentrating on delivering an attractivequality product in an environment where demand for new housing has continued tofluctuate. We remain encouraged by a steady commercial market and by Artisan(UK) Developments' ability to develop products that meet customers' demands. Finally, it is with pleasure that I can report to shareholders that thelitigation brought by Infiniteland Limited and Mr John Aviss has beensuccessfully concluded with the appellants denied permission to appeal to theHouse of Lords. FINANCIAL REVIEWThe Group's turnover for the current period has increased to £12.9m (30September 2004: £10.7m) as a result of improved trading in both the residentialand commercial markets. Rippon's turnover is up £1.7m, a 22% increase, andcommercial activity has increased by £0.5m, a 15% rise on the comparable periodto 30 September 2004. Gross margins have only suffered slightly despite a competitive market in thefirst half. Operating profit has improved to £1.04m (2004: £0.95m) as a result of theimproved turnover and some modest control of overheads. However this 10 per centincrease is after the exceptional costs relating to the departure of our formerChief Executive which masks the underlying improvement in performance. Withoutthese costs the operating profit rose 40% to £1.32m (2004: £0.95m). The balance sheet net assets rose to £16.8m (30 September 2004: £14.7m) and netassets per share now stand at 5.8p per share (30 September 2004: 5.1p pershare). Gearing at 30 September 2005 is 32% (30 September 2004: 58%). The Board expectsthat this level of gearing will increase as our planned expenditure on the landbank is incurred. Our banking facilities with The Royal Bank of Scotland plccontinue to be flexible and appropriately structured for a growing developmentcompany. Following the improvement in our net asset position and profitability,the Board has achieved some relaxation in the financial covenants, particularlyaimed at improving our ability to boost activity in Artisan (UK) Developments. OPERATIONAL REVIEWThe 22% increase in housing turnover compared with the same period in 2004followed a focus on better product planning and enhancing availability to ensurethat Rippon Homes was better positioned to meet such demand as there was in amore depressed market. Unit sales amounted to 51 homes (2004: 50 units). Muchemphasis is now being placed on further developing our land stocks in order thatan increased number of outlets can be offered.In the last interim report we stated that we were moving into new geographicareas, notably developments just west of Nottingham. These have provedsuccessful and we have recently opened our first site in Yorkshire. With strongencouragement from the Board, John Jones and his management team are working torefine the strategy for organic growth. In particular Rippon Homes is seeking toacquire land for key strategic sites in target areas. From these key sites,smaller satellite sites become increasingly viable. Management have responded to generally sluggish but changeable market conditionswith innovative marketing techniques, diligent sales management and well honednegotiating skills. Working to a controlled and measured process, part exchangesand sales assistance packages continue to be offered to customers. Rippon Homes has varied its product mix to include smaller properties to reflectthe continued increase in single or re-established home occupancies and it isexpected that this will be reflected in sales in the second half of the currentfinancial year. Rippon Homes has remained successful in selling traditional 4bedroom houses during the Interim period. However despite the market trendtowards smaller units in general, we believe that there will be a return tolarger, more valuable properties in due course and we continue to search forsites for our premium Living Heritage product. Artisan announced on 27 October 2005 that Rippon had acquired a significantsite, close to the centre of Mansfield, which will eventually be developed witha minimum of 76 units. The company is also at an advanced stage in theacquisition of a further significant site which fulfils our strategic andcommercial criteria. Commercial business park turnover increased by 15% in the six months compared tothe same period last year. The impending changes in the SIPP regulations willreduce the debt level available to SIPP schemes on their purchase of property.As a consequence we have experienced interest by buyers seeking to completepurchases prior to this change. Since the half year we have agreed two forwardsales for completion in the first half of 2006. This demonstrates theconstruction team's ability to deliver buildings to a tight build schedule.Despite the changes in SIPP legislation, we believe that SIPP investment intrading premises will remain an important option for well funded entrepreneurs,which are frequently customers of Artisan (UK) Developments. In addition, we have seen some recovery in the industrial buildings market tofollow our success in the office market. To date this year we have completed thesale of nine small industrial units, with one more sale agreed and only two leftto sell. We are also commencing the construction of 10,000 sq ft of industrial space andhave agreed terms for a forward sale for half of the space. LITIGATIONAs recently announced, the House of Lords has refused leave to appeal to theappellants in respect of the litigation between Artisan and Infinitelandconcerning the disposal of Bickerton Construction Limited. This was the expectedoutcome for Artisan and clearly vindicates the actions of the Board in thecourse of its dealings with the purchaser of Bickerton. Your Board will seek tocollect what is feasible in further sums due from Mr Aviss, although £456,000 inrespect of costs and interest has already been paid over and the costs elementrecognised as an exceptional income below operating profit in the Interimaccounts to 30 September 2005. Any further collection of funds will enhanceprofits. The time and effort devoted to this long running saga has been asignificant distraction. On behalf of shareholders I should like to record ourthanks to Chris Musselle who has borne the brunt of this case. We have received no further communication from the liquidator of BickertonConstruction Limited concerning his enquiries into management charges fromArtisan around the time of the sale of Bickerton. Provision continues to be madefor the costs of defending this enquiry. FUTURE PROSPECTSThe outlook for residential sales is unpredictable. Our experience since theyear end has seen sales as difficult to conclude. We will continue to focus onour strategy of providing product that is attractive to local demand, utilisinginnovative marketing techniques and ensuring that sales are achieved in a mannerthat protects gross margins. Despite these efforts, our trading performance overthe coming months is bound to remain vulnerable to volatile demand. January 2005saw an uplift in sales activity and we look for this to be repeated in January2006. The market for commercial property in the areas in which we operate remainsreasonably steady, but further sales are still needed to meet year end targets.We are now seeking further sites both to replace maturing sites and in new areasto broaden the prospects of this division. As regards dividends, I refer back to my comments in the 31 March 2005 AnnualReport and retain the view that greater shareholder returns will be achieved byinvestment in the businesses rather than by way of distributions at this time.Your board recognises that dividends do however remain of great importance toshareholders. MICHAEL W STEVENSChairman29 November 2005 ARTISAN (UK) PLCCONSOLIDATED PROFIT AND LOSS ACCOUNT Six months to 30 September 2005 Six months Six months Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 (Unaudited) (Unaudited) (Audited) £ £ £ Turnover 12,881,041 10,741,460 27,326,235 Operating profit beforeexceptional employment costs 1,324,162 945,725 2,722,119 Operating profit 1,039,758 945,725 2,722,119 (Loss) on sale of groupundertaking in prior year - - (7,640)Exceptional release ofprovision/ 425,000 - (125,000)(provisions) in respect ofsale of group undertakings inprevious years Exceptional profits arising oncurrent asset investments and - 69,476 69,476loan notes 1,464,758 1,015,201 2,658,955 Interest payable (208,911) (299,994) (536,538) Interest receivable and 37,448 140,624 12,631similar income Profit on ordinary activities 1,293,295 855,831 2,135,048before taxation Taxation on ordinary (197,396) (163,631) (397,565)activities Retained profit for the period 1,095,899 692,200 1,737,483 Basic and diluted earnings per 0.38p 0.24p 0.60pshare All amounts included in operating profit relate to continuing operations. Operating profit has been arrived at after charging exceptional costs of£284,404 (periods ended 30 September 2004 and 31 March 2005: £nil) in respect ofdeparture of the former Chief Executive. ARTISAN (UK) PLCCONSOLIDATED BALANCE SHEET As at As at As at 30 September 30 September 31 March 2005 2004 2005 (Unaudited) (Unaudited) (Audited) £ £ £ Fixed assets Intangible assets 2,392,714 2,549,698 2,471,206Tangible assets 350,040 344,087 340,199 2,742,754 2,893,785 2,811,405Current assets Investments 5,000 5,000 5,000 Stocks and work in 24,514,487 24,006,169 21,786,214progressDebtors 4,225,165 4,783,792 6,791,533Cash at bank and in hand 3,005 21,265 5,207 28,747,657 28,816,226 28,587,954 Creditors Amounts falling due within (8,834,843) (8,031,959) (8,094,628)one year Net current assets 19,912,814 20,784,267 20,493,326 Total assets less current 22,655,568 23,678,052 23,304,731liabilities Creditors Amounts falling due aftermore than one year (5,370,196) (8,442,941) (7,060,746) Provisions for liabilities (474,331) (565,252) (528,843)and chargesNet assets 16,811,041 14,669,859 15,715,142 Capital and reserves Called up share capital 1,442,647 1,442,647 1,442,647Share premium account 9,456,668 9,456,668 9,456,668Merger reserve 515,569 515,569 515,569Capital redemption reserve 91,750 91,750 91,750Profit and loss account 5,304,407 3,163,225 4,208,508Equity shareholders' funds 16,811,041 14,669,859 15,715,142 ARTISAN (UK) PLCCONSOLIDATED CASH FLOW STATEMENT Six months Six months Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 (Unaudited) (Unaudited) (Audited) £ £ £Net cash inflow/(outflow) fromoperating activities 1,843,781 (4,414,581) (2,121,632) Returns on investments andservicing of finance Interest received and similar 37,448 140,624 12,631incomeInterest paid (195,062) (299,994) (489,149) (157,614) (159,370) (476,518) Taxation UK Corporation tax paid (395,030) - (520,064) Capital expenditure and financialinvestment Purchase of tangible fixed assets (25,469) (5,023) (25,294) Sale of tangible fixed assets - 4,260 4,894 (25,469) (763) (20,400) Acquisitions and disposals Disposal of subsidiary undertakings 425,000 - (7,640)in prior year Net cash inflow/(outflow) beforeuse of liquid resources and 1,690,668 (4,574,714) (3,146,254)financing Management of liquid resources Sale of current asset investments - 477,966 477,966and loan stock Financing (Repayment)/advance of borrowings (1,690,550) 7,483,934 6,042,362Capital element of finance leases (2,320) (2,946) (5,892) (1,692,870) 7,480,988 6,036,470 (DECREASE)/INCREASE IN CASH (2,202) 3,384,240 3,368,182 ARTISAN (UK) PLCNOTES TO THE CASH FLOW STATEMENT (a) Reconciliation of operating profit to net cash inflow/(outflow) fromoperating activities Six months Six months Year ended ended ended 30 September 30 31 March 2005 September 2005 (Unaudited) 2004 (Audited) (Unaudited) £ £ £ Operating profit 1,039,758 945,725 2,722,119 Depreciation 15,628 27,468 51,163 Amortisation 78,492 78,492 156,984Profit on disposal of fixed - (2,614) (2,784)assetsIncrease in stock (2,728,273) (5,280,083) (3,060,128) Decrease/(increase) in 2,566,368 59,235 (1,948,506)debtorsIncrease/(decrease) increditors and provisions 871,808 (242,804) (40,480)Net cash inflow/(outflow)from operating activities 1,843,781 (4,414,581) (2,121,632) (b) Reconciliation of net cash flow to movement in net debt Six months Six months Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 (Unaudited) (Unaudited) (Audited) £ £ £ (Decrease)/increase in cash (2,202) 3,384,240 3,368,182 Cash outflow/(inflow) fromdecrease in debt and lease 1,692,870 (7,480,988) (6,036,470)financing Cash inflow from decrease inliquid resources - (477,966) (477,966) Change in net debt resultingfrom cash flows 1,690,668 (4,574,714) (3,146,254) Transfer in respect of loannotes redeemed with current - 236,453 236,453asset investments Profit on sale of current - 69,476 69,476asset investments Opening net debt (7,052,859) (4,212,534) (4,212,534) Closing net debt (5,362,191) (8,481,319) (7,052,859) (c) Analysis of net cash and debt At Cash At 31 March Flow 30 2005 September 2005NET CASH £ £ £ Cash at bank 5,207 (2,202) 3,005 5,207 (2,202) 3,005 DEBT Finance leases (2,320) 2,320 -Debt due after morethan one year (7,060,746) 1,690,550 (5,370,196) Current asset 5,000 - 5,000investment Net debt (7,052,859) 1,690,668 5,362,191 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 2005 statutory accounts to 31 March 2005. 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 12 months ended 31 March 2005 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 15.3% due to the availability of trading and capital losses brought forward to offset against profits of the current period (30 September 2004: 19.1%). 3. The calculation of earnings per share is based on the profit on ordinary activities after taxation and 288,529,426 (30 September 2004: 288,529,426) 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 twelve months ended 31 March 2005 was 288,529,426. There are no potentially dilutive shares in 2005 and 2004. 4. The Board has decided that there will be no interim dividend. 5. The interim statement was approved by the Board of Directors on 29 November 2005. Copies are being sent to all shareholders. Copies of this statement will be available to members of the public, free of charge, from the Company's registered office, Mace House, Sovereign Court, Ermine Business Park, Huntingdon, Cambridgeshire, PE29 6XU. NOMINATED ADVISER PRINCIPAL BANKERS Seymour Pierce Royal Bank of Scotland plc3 Queen Victoria Street 10 St Peter's StreetLondon St AlbansEC4N 8EL AL1 3LY STOCKBROKER SOLICITORS Seymour Pierce Thomson Webb & Corfield3 Queen Victoria Street 16 Union RoadLondon CambridgeEC4N 8EL CB2 1HE AUDITORS SOLICITORS BDO Stoy Hayward LLP Simmons & Simmons8 Baker StreetLondon CityPoint, One Ropemaker StreetW1U 3LL London EC2Y 9SS FINANCIAL PR REGISTRAR Bankside Consultants Capita Registrars1 Fredericks Place 34 Beckenham RoadLondon BeckenhamEC2R 8AE Kent BR3 4TU Artisan (UK) plc Registered office: Mace House, Sovereign Court, Ermine Business Park, Huntingdon, Cambridgeshire, PE29 6XU www.artisan-plc.co.uk email@artisan-plc.co.uk Telephone 01480 436666 Facsimile 01480 436231 Registered No. 3630998 This information is provided by RNS The company news service from the London Stock Exchange