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Final Results

3 Aug 2017 07:00

RNS Number : 9659M
Bailey(C.H.) PLC
03 August 2017
 

 

C. H. Bailey plc

Final Results for the year ended 31 March 2017

C. H. Bailey plc ("C. H. Bailey", the "Company" or together with its subsidiaries the "Group"), a diverse group of international businesses, with investments and operations in leisure, property and engineering with its current key markets being Tanzania, Malta and the UK announces its audited final results for the year ended 31 March 2017.

 

 

 

Group Financial Summary

 

Summary of group results

2017

£'000s

2016

£'000s

2015

£'000s

2014

£'000s

Revenue from continuing operations

6,126

5,105

4,927

4,381

Gross profit from continuing operations

1,763

1,529

1,162

1,196

Gross profit margin

28.78%

29.95%

23.60%

27.30%

Operating profit/(loss) from continuing operations, before exceptional items, investment activities and depreciation

898

730

(75)

13

Profit on sale of property

-

-

8,161

-

Profit/(loss) before tax and minority interests

408

(399)

6,877

(1,408)

Profit/(loss) from continuing operations after tax

341

(426)

5,838

(1,410)

Earnings/(loss) per share from continuing operations

4.47p

(5.60p)

76.74p

(18.41p)

Earnings/(loss) per share from total operations

4.47p

(5.60p)

76.74p

(18.41p)

 

 

CH Bailey plc

Bryan Warren, Company Secretary

+44 (0) 1633 262 961

 

Arden Partners plc

William Vandyk, Ciaran Walsh

+44 (0) 207 614 5900

 

Chairman's Statement

 

 

Your group has had a positive year, with all aspects of the business showing improvement over 2016. We have benefited from additional serviced rental income following the completion of Phase III of the development in Dar es Salaam, have made significant progress with our development properties in Malta, the African hospitality business has had a better year and our UK engineering business has continued its turnaround.

 

After the purchase last year of The Galenia Estate/Little Bean Farm in South Africa, we have been exploring other development opportunities in the Western Cape area. During the year, we had an offer accepted on a property in Cape Town, but were immediately able to re-sell the right to buy at a profit. In February 2017 we conditionally exchanged contracts on a residential property in Cape Town, which we believe has significant development potential, and completed the purchase in May for some £599k.

 

Results

Your Group in the year under review made a profit after tax of £0.3m (2016: loss £0.4m). Underlying trading has continued to improve with an operating profit of £853k (2016: profit £33k).

 

Overall Group revenues were up by 20% to £6.1m. Underlying trading continued to improve with EBITDA up from £0.9m last time to £1.9m this year and operating profit of £0.9m, up from £33k in 2016. Cash of £0.6m was generated from operations compared with £0.3 absorbed from operations in 2016.

 

Africa

Revenue in Africa from our serviced units and hospitality increased by £0.8m to £4.5m (23%). The Oyster Bay Suites increased their revenue from £224k in their first year of operation to £315k this year, while the serviced offices at Oyster Bay, our most significant asset, increased turnover by £608k to £3.3m (22%). The challenge will be to sustain the performance in Tanzania as commercial rents are coming under serious pressure due to a decline in demand and an oversupply in the market of commercial properties.

 

Hospitality revenues in Tanzania showed a marginal improvement, with revenues up from £635k to £673k and our new hospitality unit in South Africa achieved revenues of £195k in its first year under our ownership.

 

The sale of Mikumi Camp has been finalised with the purchaser paying a monthly amount totalling £65k over a 4 year period. We retain the operating licence and will not transfer this until the full amount has been paid and so we continue to show the asset as held for sale.

 

The opportunity to develop the Galenia Estate/Little Bean Farm properties in South Africa remains, but it may take longer to obtain permissions for development than we had first hoped. However, we believe that the residential property at Glendale Terrace in Cape Town, which we bought since the year end, has the potential to achieve a development profit within a two year time frame. The buoyancy of the Cape Town market was demonstrated during the year, when we had an offer accepted to buy one development property, but were immediately able to sell on the right to buy for a profit of £48k.

 

We continue to monitor this market for interesting opportunities to achieve value growth.

 

Malta

Having completed the development of 123 St Lucia Street, we are now in the process of marketing, both this and the previously developed St Barbara Bastians property, as well as the Charles Street property with its existing planning permission.

 

The level of interest in these properties suggests Malta could become a profit centre for the Group during the year to 31 March 2018. We continue to see further development opportunities in the Valletta area and will assess their potential on a case by case basis if we are able to complete transactions for the existing developments.

 

Engineering

Bailey Industrial Engineering Limited (BIE) has exceeded our expectations during the period, in what had seemed a difficult market, and continued its turnaround story. Revenue has increased by 12% to £1.6m, generating EBITDA of £229k against £40k last year and an operating profit of £153k (2016 - loss £37k). Orders have continued to be robust from most of our key customers to date and we are encouraged by the progress of this business.

 

Outlook

We operate in very different markets across the group which react in different ways to macro-economic and local developments. The rental market in Tanzania is currently proving difficult and will require careful handling. Our approach to property development is to identify opportunities which can grow in value, regardless of local economic conditions, and we shall continue to follow this approach. We remain cautiously confident of the continued success of our engineering business.

 

Dividend

The Board has concluded that, although a profit has been achieved in the current year, it is too early to determine that this can be consistently achieved, given the volatility of the various markets in which the Group operates. Therefore, the Board does not recommend the payment of a dividend for the year (2016: £Nil).

 

People

We have had a consistent Board during the period and I would like to take this opportunity to thank them and all our employees for their hard work and dedication during the year. Ultimately, this is a service business and it relies on our people to keep our customers and tenants happy.

 

David Wilkinson

Chairman

2 August 2017

 

 

Strategic Report

 

 

Principal objectives and strategy

 

Your Company's principal objective is to achieve profitability from the existing asset base to allow further investment when opportunities arise and provide a return on investment to shareholders or increase the value of the investment to shareholders. The Board intends to do this through growth, by purchasing, developing, operating and trading in property in the existing geographical areas in which we operate or new areas where we have knowledge and with which we have associations. It is envisaged that such properties will be specifically targeted for their development and operating opportunities in the hospitality, leisure, residential, retail and commercial sectors. Our existing properties in Malta, Tanzania and South Africa all have the potential for significant increases in value.

 

Key performance indicators

 

Revenue continuing operations

Operating profit (loss) continuing operations

EBITDA

Total bank borrowing

Net assets

 

£

£

£

£

£

Classes of business

 

 

 

 

 

Engineering:

 

 

 

 

 

2017

1,597,994

153,517

229,101

(240,346)

332,221

2016

1,425,101

(36,813)

40,099

(325,773)

183,086

 

 

 

 

 

 

Tourism and serviced units - Africa and United Kingdom agent:

 

 

 

 

 

2017

4,526,769

687,217

1,640,644

 (4,739,405)

6,770,202

2016

3,680,110

642,507

1,460,816

 (4,891,130)

5,219,364

 

 

 

 

 

 

Investment and development property - Malta:

 

 

 

 

2017

1,282

40,311

75,045

(728,454)

4,087,975

2016

-

126,137

143,842

-

3,799,978

 

 

 

 

 

Management:

 

 

 

 

 

2017

-

(28,067)

(28,067)

(305,841)

2,167,055

2016

-

(698,371)

(698,231)

(245,901)

2,858,095

 

 

 

 

 

 

Total:

 

 

 

 

 

2017

6,126,045

852,978

1,916,723

 (6,014,046)

13,357,453

2016

5,105,211

33,460

946,526

 (5,462,804)

12,060,523

 

 

Key properties

 

The key properties owned by the group and their current uses are as follows:

Malta

- 30 St Barbara Bastions Office

- 123 St Lucia Street Office development near completion

- 16-18 Charles Street Planning permission obtained for development

- 149 Archbishop Street Planning permission in progress

Tanzania

- Oyster Bay Hotel Hospitality

- Oyster Bay Suites Serviced accommodation

- Oyster Bay Offices Serviced units

- Oyster Bay Shopping Centre Retail

- Kimbiji Bay Development land

South Africa

- The Galenia Estate Hospitality

- Galenia House Hospitality

- Hauts de Montagu farm Development land

- Little Bean Farm Agri-village development

- Glendale Crescent Residential development

- Palmyra Road Residential development

 

Africa operational performance

Commercial property in Dar es Salaam continues to be the main driver of our profitability in Africa. The serviced offices at Oyster Bay again showed high occupancy levels, albeit slightly down on last year (95% at 31 March 2017 against 97% for 2016), while retail occupancy improved marginally to 85% from 84% last year.

 

This performance is particularly commendable against the backdrop of a difficult market, with a significant over-supply of office space in Dar Es Salaam, as well as a number of rental agreements coming to an end during this and the next period. Negotiations continue with existing and potential new clients.

 

Tourism in East Africa as a whole has continued to be difficult this year and we do not expect the situation to improve significantly in the short term. While our hospitality revenues in Tanzania are therefore likely to remain flat, we are hoping that bookings at Gallenia Estate in South Africa will show an increase from an already promising first year.

 

Malta operational performance

The office development at 123 St Lucia Street was completed in April this year and we are in the process of marketing it as serviced offices, as an entire building and in smaller units. We have received a lot of interest, due to the location and quality of the rehabilitation, including from a potential buyer and we expect it to generate revenue during the coming year.

 

We have also received interest from potential tenants for the office/residential property at St Barbara Bastians and from potential buyers for the Charles Street property, for which we have obtained planning permission to develop.

 

Engineering operational performance

Revenue derived from our engineering division in the United Kingdom increased by 12% to £1.6m (2016: £1.4m). The operating profit was £153k (2016: loss £37k).

 

Principal risks and uncertainties

The group's principal risks are as follows:

 

Going concern

The board remains satisfied with the group's funding and liquidity position. The group operated within its current bank facility both throughout the period under review and subsequently.

 

The group's forecasts and projections indicate that the group should continue to operate within current bank facilities. The board considers that the group has considerable financial resources together with a diverse base of operations across different geographical areas and industries. As a consequence, the board believes that the group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

 

After making enquiries, the board has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing this Annual Report & Financial Statements.

 

 

 

 

Strategic risks

The group faces a number of strategic risks. Management has developed long term business plans to manage the impact of these risks to ensure that the group delivers a satisfactory performance in future years. The main strategic risks faced by the business are:

 

· Emerging market risks - the directors recognise that the group faces a higher level of risk (and reward) because it operates in emerging markets, where operating and legal practices are different to those in the UK. Management have good knowledge of these markets and closely monitor events there to manage these risks;

· Competition: In order to remain competitive management recognises the need to make appropriate capital investments;

· Profit margin: In order to improve the margins management recognise the need to reduce fixed costs where appropriate and link them to a sustainable level of turnover.

 

Financial risks

There has been no change during the year, or since the year end, to the type of financial risks faced by the group or the group's management of those risks. The key risks, which are discussed in more detail in note 30 to the consolidated financial statements, are:

· Credit risk;

· Liquidity risk;

· Interest rate risk;

· Currency risk.

 

 

Director's Report

 

 

The directors submit their report and accounts for the year ended 31 March 2017.

 

Principal activities

C.H. Bailey plc is the holding company of subsidiary undertakings engaged in the development and operation of properties in the commercial, retail and hospitality sectors in the Mediterranean Basin and South and East Africa and in engineering in the United Kingdom. The profit on these various activities which is attributable to the shareholders amounted to £341,489 (2016: loss £426,314).

 

A review of the group's business, development and prospects can be found in the chairman's statement. The financial management objectives and policies can be found in the strategic report.

 

Dividend

The directors do not propose to pay a final dividend in respect of the year ended 31 March 2017 (2016: £Nil).

 

Change in fixed assets

A summary of the changes in property, plant and equipment is given in note 13 to the accounts.

 

A summary of the changes in investments in subsidiary undertakings is given in note 14 to the accounts.

 

In the directors' opinion, at 31 March 2017, the market value of leasehold land and buildings was not less than £24,000,000 and the market value of freehold land and buildings was not significantly higher than the carrying amount.

 

Investment in own shares

On 21 September 2016, the company issued 10,863 ordinary shares of 10 pence to the directors in lieu of fees payable of £14,340 and on 14 March 2017, the company issued 8,419 ordinary shares of 10 pence to the directors in lieu of fees payable of £11,113. The company retains as treasury shares 685,229 shares of 10 pence at a cost of £904,502 (2016: 704,511 shares of 10 pence at a cost of £929,955).

 

Directors

The board of directors on 31 March 2017 consisted of Charles Bailey, Sir William McAlpine, David Wilkinson and Christopher Fielding. The director retiring by rotation and offering himself for re-election is Sir William McAlpine. No director had, in the financial year to 31 March 2017, a material interest in any contract to which the company or a subsidiary undertaking was a party.

 

Charles Bailey is the only executive director. The non-executive directors are Sir William McAlpine, David Wilkinson and Christopher Fielding.

 

The directors had the following interests in the company's issued ordinary share capital:

 

 2 August 201731 March 2017 31 March 2016
Charles Bailey

5,347,286

5,347,286 5,277,686
Sir William McAlpine, Bt.

37,815

37,815 32,631
David Wilkinson

15,960

15,960 6,130
Christopher Fielding

16,654

16,654 12,386

 

Substantial shareholdings

The company has been notified of the following interest in the company's issued ordinary share capital:

 

 2 August 201731 March 201731 March 2016
P. S. Allen 412,169 412,169 412,169
D. Newlands 229,000 229,000 229,000

Charitable and political contributions

During the year the group made a contribution of £9,581 (2016: £8,869) to charitable funds in Tanzania. No donations of a political nature were made (2016: £Nil).

 

Employees

The group is an equal opportunities employer. The group also makes every reasonable effort to give disabled applicants and existing employees, who became disabled, equal opportunities for work having regard to their individual aptitudes and abilities.

 

Employee reporting and involvement

The group recognises the need to ensure effective communication with employees to encourage involvement in the group's performance. Policies and procedures have been developed to achieve a common awareness of factors affecting the performance of the group.

 

Suppliers

The group agrees payment terms with suppliers prior to placing business. The group seeks to abide by the payment terms agreed with suppliers whenever it is satisfied that the supplier has supplied the goods or services in accordance with the agreed terms and conditions.

 

Health, safety, the environment and social policy

It is the group's policy to comply with relevant legislation in all countries in which it operates and to adopt responsible environmental and social practices. Training is provided to ensure that the group keeps abreast of changing business and regulatory requirements and technological advances.

 

Close company

In the opinion of the directors the company is, at the accounting date and the date of this report, a close company within the terms of the Income and Corporation Taxes Act 1988.

 

Auditors

In the case of each of the persons who are the directors of the company at the date when this report was approved:

 

· So far as each director is aware, there is no relevant audit information (that is, information needed by the company's auditors in connection with preparing their report) of which the company's auditors are unaware;

· Each director has taken all the steps that ought to be taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

 

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

 

Haasco Limited is willing to continue in office and a resolution for their re-appointment will be proposed at the annual general meeting.

 

Statement of Corporate Governance

 

 

The board

At 26 July 2017, the board comprised one executive director: Charles Bailey (chief executive officer), and three non-executives: David Wilkinson, non-executive chairman, Sir William McAlpine and Christopher Fielding.

 

The board of directors is responsible to shareholders for the management and control of the group. The board operates within agreed matters reserved for its approval, which cover the key areas of the group's affairs, including all aspects of strategy, material property acquisitions, disposals and group financing arrangements.

 

Board meetings are held periodically during the year and each board member is provided in advance of the meeting with a board pack for each meeting which contains financial and operational information. The board is responsible for agreeing the major matters affecting the running of the business, as well as monitoring and reviewing performance and operating risks.

 

 

Year ended 31 March 2017

Meeting type

 

Member

Board

Audit & Risk Committee

Remuneration Committee

Charles Bailey

8/8

-

1/1

 

Sir William McAlpine

8/8

2/2

-

David Wilkinson

8/8

-

1/1

Christopher Fielding

8/8

2/2

1/1

Bryan Warren

8/8

2/2

-

     

 

 

As of 04 August 2017, the board has two subcommittees: the Audit & Risk Committee and the Remuneration Committee. Christopher Fielding is chairman of the Audit & Risk Committee, and has relevant financial experience as suggested by Provision C.3.1 of the UK Corporate Governance Code. Christopher Fielding is also chairman of the Remuneration Committee. Written Terms of Reference for each Committee have been agreed.

 

Audit & Risk Committee

The Audit & Risk Committee comprises Christopher Fielding (chairman), Sir William McAlpine and Bryan Warren. The committee is tasked to meet at least twice a year, in respect of the following:

 

Audit and the auditors

· to assess annually the qualification, expertise and resources, and independence of the external auditor, taking account of relevant Ethical Standards, and to ensure that the Auditor's key partners are rotated at appropriate intervals;

· to assess annually the effectiveness of the audit process;

· to review with management the audit fee and to ensure that the provision of non audit services does not impair the external auditor's independence or objectivity;

· to develop and implement a policy on the supply of non audit services by the external auditor;

· to discuss with the external auditor, before the audit commences, the nature and scope of the audit and to review the auditor's quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements;

· to make appropriate recommendations to the board, if considered necessary, regarding the continuation of the external auditor, to oversee the selection process for new auditors and, if an auditor resigns, to investigate the issues leading to this and decide whether any action is required;

· to consider the need to include the risk of withdrawal of the external auditor from the market in the committee's risk assessment process;

· to review the external auditor's management letter and management's response;

Risk and internal controls

· to review the effectiveness of the group's internal control and risk management framework, in relation to the core strategic objectives of the company;

· to consider the risks associated with proposed strategic acquisitions or disposals;

· to review regular risk management reports from management which enable the committee to assess the risks involved in the company's business and how they are controlled and monitored by management;

· to monitor and review the effectiveness of the risk management and internal audit functions, to review the internal audit programme, and to seek such assurance as it may deem appropriate that the functions are adequately resourced and have appropriate standing within the group; and

· to consider management's response to any recommendations made by the external auditor or internal audit and review with internal audit and the external auditor any fraudulent or illegal acts, deficiencies in internal control or other similar issue, including reviewing the results of management's investigation and follow up of any fraudulent acts.

Annual financial statements

· to review, and challenge where necessary, the actions and judgements of management in relation to the annual financial statements, paying particular attention to:

· critical accounting policies and practices, and any changes in them;

· decisions requiring a major element of judgement;

· the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;

· the clarity of disclosures;

· significant adjustments resulting from the audit;

· the going concern assumption;

· compliance with accounting standards and related guidance;

· compliance with other legal requirements;

· to review treasury policies from time to time;

· to review the company's procedures for handling allegations from whistleblowers;

· to review mechanisms for informing and updating the board on independence issues, to receive reports on monitoring of independence and the handling of any issues relating to non compliance;

· to review tax compliance and tax planning initiatives of the company; and

· to perform other oversight functions, as requested by the board.

 

Remuneration Committee

The Remuneration Committee comprises Christopher Fielding (chairman), David Wilkinson, Sir William McAlpine and Charles Bailey. The committee is tasked to meet at least once a year, in respect of the following:

 

· to determine and agree with the board the framework or broad policy for the remuneration of the company's chief executive, chairman, the executive directors, the company secretary and such other members of the executive management as it is designated to consider. The remuneration of non-executive directors shall be a matter for the chairman and the executive members of the board. No director or manager shall be involved in any decisions as to their own remuneration;

· in determining such policy, take into account all factors which it deems necessary. The objective of such policy shall be to ensure that members of the executive management of the company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the company;

· review the ongoing appropriateness and relevance of the remuneration;

· approve the design of, and determine targets for, any performance related pay schemes operated by the company and approve the total annual payments made under such schemes;

· review the design of all share incentive plans for approval by the board. For any such plans, determine each year whether awards will be made, and if so, the overall amount of such awards, the individual awards to executive directors and other senior executives and the performance targets to be used;

· determine the policy for, and scope of, pension arrangements for each executive director and other senior executives;

· ensure that contractual terms on termination, and any payments made, are fair to the individual, and the company;

· in determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority's Listing Rules and associated guidance;

· review and note annually the remuneration trends across the company or group;

· oversee any major changes in employee benefits structures throughout the company or group;

· agree the policy for authorising claims for expenses from the chief executive and chairman;

· ensure that all provisions regarding disclosure of remuneration, including pensions, are fulfilled;

· be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee;

· obtain reliable, current information about remuneration in other companies. The Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations.

 

Statement on internal control

The directors are responsible for the system of internal control and for reviewing its effectiveness. This system is designed to manage as effectively as possible the risk of failure to achieve business objectives and can only provide reasonable rather than absolute assurance against material misstatement or loss.

 

Statement of Directors' Responsibilities

 

 

The directors are responsible for preparing the annual report and the group and parent financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare group and parent company financial statements for each financial year.

 

As required by the AIM rules of London Stock Exchange, they are required to prepare the group financial statements in accordance with IFRSs as adopted by the European Union and applicable law, and have elected to prepare the parent company financial statements in accordance with IFRS.

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group and parent company financial statements, the directors are required to:

 

· Select suitable accounting policies and then apply them consistently;

 

· Make judgements and estimates that are reasonable and prudent;

 

· For the group and parent company financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the European Union;

 

· Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance;

 

· Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and

 

· Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and the group and to prevent and detect fraud and other irregularities.

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions in which the group has undertakings.

Independent Auditor's Report

 

 

We have audited the group and individual company financial statements of C.H. Bailey plc for the year ended 31 March 2017 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated and parent company balance sheets, the consolidated and parent company cash flow statements, the consolidated and parent company statements of changes in equity and the related notes 1 to 34.

 

The financial reporting framework that has been applied in the preparation of the group and company financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility for anyone, other than the company or the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Respective responsibilities of directors and auditors

As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

 

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.

 

Opinion on financial statements

In our opinion:

 

· The financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2017 and of the group's profit for the year then ended;

 

· The financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and

 

· The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

 

Opinion on other matters prescribed by Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

· The information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements;

· The Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

 

Matters on which we are required to report under the Companies Act 2006

In the light of the knowledge and understanding of the group and parent company and its environment obtained in the course of the audit, we have not identified any misstatements in the Strategic Report and the Directors' Report.

 

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where Companies Act 2006 requires us to report to you if, in our opinion:

 

· Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

 

· The parent company financial statements are not in agreement with the accounting records and returns; or

 

· Certain disclosures of directors' remuneration specified by law are not made; or

 

· We have not received all the information and explanations we require for our audit.

 

 

 

Mr D.R. Thomas FCA

Senior Statutory Auditor

 

 

 

Statutory Auditor

Haasco Limited

Newport

South Wales

2 August 2017

 

Consolidated Income Statement

for the year ended 31 March 2017

 

 

 

 

 

Notes

2017

 

2016

 

 

£

 

£

 

 

 

 

 

Continuing operations

 

 

 

 

Revenue

4

6,126,045

 

5,105,211

Cost of sales

 

(4,363,181)

 

(3,576,420)

Gross profit

 

1,762,864

 

1,528,791

 

 

 

 

 

Administrative expenses

 

(1,929,055)

 

(1,711,538)

Investment activities and other income

5

1,019,169

 

216,207

Operating profit

 

852,978

 

33,460

 

 

 

 

 

EBITDA*

 

1,916,723

 

946,526

Depreciation

 

(1,063,102)

 

(918,920)

(Loss) profit on sale of plant and equipment

(643)

 

5,854

Operating profit

 

852,978

 

33,460

 

 

 

 

 

Finance income

6

4,336

 

25,846

Finance costs

7

(449,040)

 

(457,849)

Profit (loss) before taxation

8

408,274

 

(398,543)

Taxation

11

(66,876)

 

(28,115)

Minority interest

 

91

 

344

Profit (loss) for the financial year

 

341,489

 

(426,314)

 

 

 

 

 

Earnings (loss) per share from continuing and total operations

12

 4.47p

 

 (5.60p)

 

 

*Earnings before interest, taxation, depreciation, profit on sale of plant and equipment and profit on sale of property.

Consolidated Statement of

Comprehensive Total Income

for the year ended 31 March 2017

 

 

 

 

 

Notes

2017

 

2016

 

 

£

 

£

 

 

 

 

 

Profit (loss) for the financial year

 

341,489

 

(426,314)

Items that may be reclassified to profit and loss:

 

 

 

Exchange differences

 

930,953

 

(1,543,976)

Total comprehensive income (loss) for the year

1,272,442

 

(1,970,290)

 

 

 

 

Balance Sheets

as at 31 March 2017

 

 

 

 

 

 

Group

 

Company

 

Notes

2017

2016

 

2017

2016

 

 

£

£

 

£

£

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

13

14,664,816

12,827,555

 

-

-

Operating leases

 

250,049

87,626

 

 -

 -

Investments in subsidiary undertakings

14

-

-

 

982,187

1,234,974

Trade and other receivables

15

940,361

694,617

 

115,200

153,600

Deferred tax asset

16

272,219

231,757

 

205,170

187,304

 

 

16,127,445

13,841,555

 

1,302,557

1,575,878

Current assets

 

 

 

 

 

 

Inventory

17

26,035

19,851

 

-

-

Trade and other receivables

18

3,146,436

2,334,371

 

4,569,619

4,599,770

Current asset investments

19

1,317,557

1,522,622

 

359,683

241,599

Cash and cash equivalents

20

1,336,175

2,183,225

 

550,311

555,909

 

 

5,826,203

6,060,069

 

5,479,613

5,397,278

Assets classified as held for sale

 

199,797

178,112

 

-

-

 

 

6,026,000

6,238,181

 

5,479,613

5,397,278

Current liabilities

 

 

 

 

 

 

Trade and other payables

21

(2,475,740)

(2,287,285)

 

(716,080)

(720,080)

Bank loans and overdrafts

22

(2,315,981)

(2,049,180)

 

(305,841)

(245,901)

Obligations under finance leases

23

-

(1,934)

 

-

-

Provisions

24

(225,000)

(225,000)

 

(225,000)

(225,000)

 

 

(5,016,721)

(4,563,399)

 

(1,246,921)

(1,190,981)

Net current assets

 

1,009,279

1,674,782

 

4,232,692

4,206,297

Total assets less current liabilities

 

17,136,724

15,516,337

 

5,535,249

5,782,175

Non-current liabilities

 

 

 

 

 

 

Bank loans

22

(3,698,065)

(3,413,624)

 

-

-

Obligations under finance leases

23

-

-

 

-

-

Deferred tax liabilities

25

(81,206)

(42,190)

 

-

-

Net assets

 

13,357,453

12,060,523

 

5,535,249

5,782,175

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Called-up share capital

26

833,541

833,541

 

833,541

833,541

Share premium account

27

609,690

609,690

 

609,690

609,690

Capital redemption reserve

27

5,163,332

5,163,332

 

5,163,332

5,163,332

Investment in own shares

27

(904,502)

(929,955)

 

(904,502)

(929,955)

Translation reserve

27

58,962

54,470

 

-

-

Retained earnings

27

7,595,276

6,328,290

 

(166,812)

105,567

Surplus attributable to the parent's shareholders

 

13,356,299

12,059,368

 

5,535,249

5,782,175

Minority interest

27

1,154

1,155

 

-

-

Total equity

 

13,357,453

12,060,523

 

5,535,249

5,782,175

 

 

Consolidated Cash Flow Statement

for the year ended 31 March 2017

 

 

 

 

 

 

Group

 

Company

 

Notes

2017

2016

 

2017

2016

 

 

£

£

 

£

£

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Cash generated from operations

28

567,181

(281,549)

 

(70,862)

493,427

Overseas tax paid

 

(60,332)

(48,807)

 

-

-

Net cash flow from operating activities

 

57,809

(788,205)

 

(78,497)

484,726

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Sale of property, plant and equipment

 

7,862

32,304

 

-

-

Purchase of property, plant and equipment

 

(1,121,728)

(2,263,358)

 

-

-

Deposit on purchase of property

13

(600,000)

-

 

-

-

Sale of investments

 

1,255,205

809,533

 

-

8,000

Purchase of investments

 

(635,491)

(949,787)

 

-

-

Interest received

 

4,336

25,846

 

1

5

Net cash flow from investing activities

 

(1,089,816)

(2,345,462)

 

1

8,005

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Equity dividends paid

 

-

(1,521,551)

 

-

 (1,521,551)

Dividend to minority interest

 

-

-

 

-

-

Investment in own shares

 

24,489

32,988

 

24,489

32,988

Movement in bank loans

 

(218,378)

(1,083,462)

 

-

-

Movement in directors' loans

 

139,640

(18,636)

 

(11,531)

17,972

Movement in other loans

 

-

 

-

-

Movement in capital element of finance leases

 

(1,934)

(30,194)

 

-

-

Net cash flow from financing activities

 

(56,183)

(2,620,855)

 

12,958

 (1,470,591)

 

 

 

 

 

 

 

Net (decrease) in cash and cash equivalents

 

(1,088,190)

(5,754,522)

 

(65,538)

(977,860)

Cash and cash equivalents at beginning of year

29

134,045

5,321,954

 

310,008

1,287,868

Exchange differences

 

(25,661)

566,613

 

-

-

Cash and cash equivalents at end of year

29

(979,806)

134,045

 

244,470

310,008

 

 

 

 

 

 

 

Reconciliation of net cash flow to movement in net funds (debt) in the year

 

 

 

 

 

 

Net (decrease) in cash and cash equivalents

 

(1,088,190)

(5,754,522)

 

(65,538)

(977,860)

Net cash flow from the movement in debt

 

220,312

1,113,656

 

-

-

Movement in net funds (debt) during the year

 

(867,878)

(4,640,866)

 

(65,538)

(977,860)

Net (debt) funds at the beginning of the year

 

(3,281,513)

933,933

 

310,008

1,287,868

Exchange differences

 

(528,480)

425,420

 

-

-

Net (debt) funds at the end of the year

29

(4,677,871)

(3,281,513)

 

244,470

310,008

 

 

 

Consolidated Statement of Changes in Equity

for the year ended 31 March 2017

 

 

 

 

 

Called-up share capital

Share premium account

Capital redemption reserve

Investment in own shares

Translation reserve

Retained earnings

Minority interest

Total

 

£

£

£

£

£

£

£

£

Group

 

 

 

 

 

 

 

 

At 31 March 2015

833,541

609,690

5,163,332

(960,509)

51,307

9,820,860

1,370

15,519,591

Transactions with owners recorded directly in equity

 

 

 

 

 

 

Equity dividends paid

-

-

-

-

-

(1,521,551)

-

(1,521,551)

Sale of investment in own shares

-

-

-

-

-

32,988

-

32,988

Cost of investment in own shares

-

-

-

30,554

-

(30,554)

-

-

Income statement

 

 

 

 

 

 

 

 

(Loss) for the financial year

-

-

-

-

-

(426,314)

(344)

(426,658)

Items that may be reclassified to profit and loss

 

 

 

 

 

 

Exchange differences

-

-

-

-

3,163

(1,547,139)

129

(1,543,847)

At 31 March 2016

833,541

609,690

5,163,332

(929,955)

54,470

6,328,290

1,155

12,060,523

Transactions with owners recorded directly in equity

 

 

 

 

 

 

Sale of investment in own shares

-

-

-

-

-

24,489

-

24,489

Cost of investment in own shares

-

-

-

25,453

-

(25,453)

-

-

Income statement

 

 

 

 

 

 

 

 

Profit for the financial year

-

-

-

-

-

341,489

(91)

341,398

Items that may be reclassified to profit and loss

 

 

 

 

 

 

Exchange differences

-

-

-

-

4,492

926,461

90

931,043

At 31 March 2017

833,541

609,690

5,163,332

(904,502)

58,962

7,595,276

1,154

13,357,453

 

 

 

 

 

 

 

 

 

Company

 

 

 

 

 

 

 

 

At 31st March 2015

833,541

609,690

5,163,332

(960,509)

-

2,249,983

-

7,896,037

Equity dividends paid

-

-

-

-

-

(1,521,551)

-

(1,521,551)

Sale of investment in own shares

-

-

-

-

-

32,988

-

32,988

Cost of investment in own shares

-

-

-

30,554

-

(30,554)

-

-

Income statement

 

 

 

 

 

 

 

 

(Loss) for the financial year

-

-

-

-

-

(625,299)

-

(625,299)

At 31st March 2016

833,541

609,690

5,163,332

(929,955)

-

105,567

-

5,782,175

Transactions with owners recorded directly in equity

 

 

 

 

 

 

Sale of investment in own shares

-

-

-

-

24,489

-

24,489

Cost of investment in own shares

-

-

-

25,453

-

(25,453)

-

-

Income statement

 

 

 

 

 

 

 

 

(Loss) for the financial year

-

-

-

-

-

(271,415)

-

(271,415)

At 31st March 2017

833,541

609,690

5,163,332

(904,502)

-

(166,812)

-

5,535,249

 

 

.

Notes to the Accounts

 

 

1. General information

 

Legal status and country of incorporation

C. H. Bailey plc, company number 190106, is incorporated in England and Wales under the Companies Act 2006. The address of the registered office is given in the audited accounts on page 39. The principal activities are set out in the Directors' Report.

 

Basis of preparation

These financial statements have been prepared in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Companies Act 2006. Therefore these financial statements comply with the AIM rules.

 

The financial statements are prepared using the historical cost basis of accounting except for:

 

· Properties held at the date of transition to IFRS which are stated at deemed cost; and

 

· Assets held for sale which are stated at the lower of fair value less anticipated disposal costs and carrying value.

 

Going concern

The directors have prepared these financial statements on the fundamental assumption that the group is a going concern and will continue to trade for at least 12 months following the date of approval of the financial statements.

 

Further information explaining why the directors believe the group is a going concern is given in the principal risks and uncertainties of the Strategic Report.

 

Accounting period

The current period is for 12 months ended 31 March 2017 and the comparative period is for the 12 months ended 31 March 2016

 

Functional and presentational currency

The financial statements are presented in pounds sterling because that is the functional currency of the primary economic environment in which the group operates.

 

Initial Adoption of International Financial Reporting Standards

These are the group's ninth consolidated financial statements that have been prepared in accordance with IFRS. The group's transition date for adoption of IFRS is 1st April 2006. The group has taken advantage of the following exemptions on transition to IFRS as permitted by paragraph 13 of IFRS 1:

 

· The requirements of IFRS 3 - Business Combinations - have not applied to business combinations that occurred before the date of transition to IFRS;

 

· The carrying value of freehold and leasehold properties are based on previously adopted UK GAAP valuations and these are now taken as deemed cost on transition to IFRS.

 

International Financial Reporting Standards adopted for the first time this accounting period

There were no new standards or amendments to standards adopted for the first time this year that had a material impact on the results or the group.

 

Future adoption of International Financial Reporting Standards

A number of new standards, amendments and interpretations to existing standards have been published by the ISAB but are not yet effective and have not been applied early by the group. It is anticipated that the following pronouncements relevant to the group's operations will be adopted in the group's accounting policies for the first period beginning after the effective date of the pronouncement once adopted by the European Union:

 

· IFRS 9 Financial instruments (effective 1 January 2018);

· IFRS 14 Regulatory deferral accounts (not yet adopted by European Union);

· IFRS 15 Revenue from contracts with customers (effective 1 January 2018);

· IFRS 16 Leases (effective 1 January 2019);

· Recognition of deferred tax assets for unrealised losses (amendment IAS 12)(not yet adopted by European Union);

· Classification and measurement of share based payment transactions (amendment IFRS 2)(not yet adopted by European Union);

· Disclosure initiative (amendment IAS 7)(not yet adopted by European Union);

· Annual improvements to IFRS 2014-2016 cycle (not yet adopted by European Union);

· IFRIC interpretation 22 Foreign currency transactions and advance considerations)(not yet adopted by European Union).

 

The company will assess the potential impact of these standards once the final version has been endorsed by the European Union. Whilst work has not yet been completed on the above standards, the directors do not currently foresee any material impact on the financial statements of the group as a result of adopting these standards.

 

 

2. Significant accounting policies

 

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries) made up to 31 March 2017. Control is achieved where the company has the power to govern the financial and operating policies of an investee so as to obtain benefits from its activities.

 

Minority interests in the net assets of consolidated subsidiaries are identified separately from the group's equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

 

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group.

 

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

Business combinations and goodwill

The acquisition of subsidiaries is accounted for using the acquisition method. The assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at their acquisition date except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 which are recognised and measured at fair value less costs to sell. Any excess of the cost over the asset valuation as calculated above is recognised as goodwill.

 

In accordance with the options that are available under IFRS 1 on transition to IFRS, the group elected not to apply IFRS 3 retrospectively to past business combinations that occurred before the date of transition to IFRS.

 

Accordingly goodwill that had previously been offset against reserves under UK GAAP has not been recognised in the opening IFRS balance sheet. The interest of any minority shareholders in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

 

Investments in associates and trade investments

The results of entities over which the group is not in a position to be able to exercise significant influence despite holding a significant shareholding are not accounted for as associates and therefore are not equity accounted. The companies are classified as trade investments and are carried as available for sale financial assets which are measured at cost, as the directors consider that fair value cannot be reliably measured, other than impairment losses which are recognised in the income statement. Dividend income is recognised in the income statement on a cash basis when received.

 

Property, plant and equipment

Property is carried at deemed cost at the date of transition to IFRS based on the previous UK GAAP valuations. Plant and equipment held at the date of transition and subsequent additions to property, plant and equipment are stated at purchase cost including directly attributable costs. The group does not have a revaluation policy. Freehold land is not depreciated. Depreciation of other property, plant and equipment is provided on a straight line basis using rates calculated to write down the cost of each asset over its estimated useful life as follows:

 

Property:

Freehold buildings Between 2% and 5%

Leasehold buildings Period of the lease

Plant and equipment Between 10% and 25%

 

Annual reviews are made of estimated useful lives and material residual values.

 

Investment and development property

Properties are externally valued on the basis of fair value at the balance sheet date. Investment property is recorded at valuation whereas trading property is stated at the lower of cost and net realisable value. Any surplus or deficit arising is recognised in investment activities in the income statement.

 

The cost of properties in the course of development includes attributable interest and other associated outgoings. Interest is calculated on the development expenditure by reference to specific borrowings. Interest is not capitalised where no development activity is taking place. A property ceases to be a development property on practical completion.

 

Investment property disposals are recognised on completion. Profits and losses are recognised in investment activities in the income statement. The profit on disposal is determined as the difference between the net sale proceeds and the carrying amount of the asset at the commencement of the accounting period plus capital expenditure in the period.

 

Where investment properties are appropriated to trading stock, they are transferred at market value. If properties held for trading are appropriated to investment, they are transferred at book value.

 

Lessee accounting

Initial rental payments in respect of operating leases are included in current and non-current assets as appropriate and amortised to the income statement over the period of the lease. Ongoing rental payments are charged as an expense in the income statement on a straight line basis until the date of the next rent review. Finance leases are capitalised and depreciated in accordance with the accounting policy for property, plant and equipment. As permitted by IFRS 1 at the date of transition to IFRS, the carrying value of long leasehold properties are based on the previous UK GAAP valuations and this has been taken as deemed cost. Rental costs arising from operating leases are charged as an expense in the income statement on a straight line basis over the period of the lease.

 

Non-current assets held for sale

Non-current assets are reclassified as assets held for sale if they are immediately available for sale in their current condition and their carrying value will be recovered through a sale transaction on which is highly probable to be completed within 12 months of the initial classification. Assets held for sale are valued at the lower of carrying value at the date of initial classification and fair value less costs to sell.

 

Impairment of non-financial assets

Goodwill is tested annually for impairment or more frequently if there are any changes in circumstances or events that indicate that a potential impairment may exist. Goodwill impairments cannot be reversed. Property, plant and equipment are reviewed for indications of impairment when events or changes in circumstances indicate that the carrying amount may not be recovered. If there are indications then a test is performed on the asset affected to assess its recoverable amount against carrying value. An asset impaired is written down to the higher of value in use or its fair value less cost to sell.

 

Deferred and current taxation

The charge for taxation is based on the taxable profit or loss for the year and takes into account taxation deferred because of differences between the treatment of certain items for taxation and for accounting purposes. Full provision is made for the tax effects of these differences.

 

Current income tax assets or liabilities comprise those claims from, or obligations to, fiscal authorities relating to current or prior periods that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year. Deferred tax is calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. Deferred tax assets and liabilities are calculated using tax rates that have been enacted, or substantively enacted, by the year end balance sheet date. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the group expects, at the end of the reporting period, to recover or settle the carrying value of its assets and liabilities. Deferred tax assets and liabilities are not discounted.

 

The carrying amount of the deferred tax assets is reviewed at each reporting balance sheet date to ensure that it is probable that sufficient taxable profits will be available to allow the asset to be recovered. Assets and liabilities, in respect of both deferred and current tax, are only offset when there is a legally enforceable right to offset and the assets and liabilities relate to taxes levied by the same taxation authority.

 

Deferred and current tax is charged or credited in the income statement except when it relates to items charged directly to equity in which case the associated tax is also dealt with in equity.

 

Stocks

Stocks are valued at the lower cost of purchase and net realisable value. Cost comprises actual purchase price and, where applicable, associated direct costs incurred bringing the stock to its present location and condition. Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow moving or defective items where appropriate.

 

Financial instruments

Financial assets and financial liabilities are recognised on the consolidated balance sheet when the group becomes a party to the contractual provisions of the instrument.

 

Financial assets are recognised and derecognised on a trade date where the purchase or sale of an asset is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned. Financial assets are classified as "loans and receivables", "held to maturity" investments, "available for sale" investments or "assets at fair value through the profit and loss" depending upon the nature and purpose of the financial asset. The classification is determined at the time of the initial recognition.

 

Financial assets are normally classified as "loans and receivables" and are initially measured at fair value including transaction costs incurred. The only financial assets currently held at "fair value through profit or loss" are the current asset investments.

 

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. There are currently no financial liabilities held at "fair value through profit or loss".

 

Loans and receivables

Trade receivables, loans and other receivables are measured on initial recognition at fair value and, except for short term receivables where the recognition of interest would be immaterial, are subsequently re-measured at amortised cost using the effective interest rate method. Allowances for irrecoverable amounts, which are dealt with in the income statement, are calculated based on the difference between the asset's carrying amount and the present value of estimated future cash flows, calculated based on past default experience, discounted at the effective interest rate computed at initial recognition where material.

 

Derivative financial instruments and hedge accounting

The group has loans held in US dollars which are disclosed in borrowings and are at fixed rates of 6.25% and 8%. The other group loans and overdrafts are subject to floating interest rates based on LIBOR plus the most competitive margin available. The group's policy is not to hedge its international assets with respect to foreign currency balance sheet translation exposure, nor against foreign currency transactions. The group generally does not enter into any forward exchange contracts and it does not use financial instruments for speculative purposes. The group does not hold any derivative financial instruments or embedded derivative financial instruments at either period end.

 

Cash and cash equivalents

Cash and cash equivalents includes cash-in-hand, cash at bank and short term highly liquid investments that are readily convertible into known amounts of cash within three months from the date of initial acquisition with an insignificant risk of a change in value.

 

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investment have been impacted.

 

Other financial liabilities

Other financial liabilities, including trade payables, are measured on initial recognition at fair value and, except for short term payables where the recognition of interest would be immaterial, are subsequently re-measured at amortised cost using the effective interest rate method.

 

Bank loans

Interest bearing bank loans are recorded at the proceeds received less capital repayments made. Finance charges are accounted for on an accruals basis in the profit and loss account using the effective interest rate method. They are included within accruals to the extent that they are not settled in the period in which they arise.

 

Provisions

Provisions are created where the group has a present obligation (legal or constructive) as a result of a past event where it is probable that the group will be required to settle that obligation. Provisions are measured at the directors' best estimate of the expenditure required to settle the obligation at the balance sheet date. Provisions are only discounted to present value where the effect is material.

 

Net funds

Net funds is defined as cash and cash equivalents, bank and other loans including finance lease obligations and derivative financial instruments stated at current fair value.

 

Revenue recognition

 

Revenue

Revenue represents the fair value of the consideration received and receivable for services provided and goods supplied to third party customers. In respect of long term contracts and contracts for on-going services, revenue is recognised as the contract progresses on the basis of work completed. Revenue excludes value added tax.

 

Investment and interest income

Dividend income is recognised in the income statement when the shareholder's right to receive payment has been established. Interest income from bank deposit accounts is accrued on a time basis calculated by reference to the principal on deposit and effective interest rate applicable.

 

Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated into pounds sterling at the financial reporting year end rates. Non monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

 

The results of overseas subsidiary undertakings, associates and trade investments are translated into pounds sterling at average rates for the year unless exchange rates fluctuate significantly during that year in which case exchange rates at the date of transactions are used. The closing balance sheets are translated at the year end rates and the exchange differences arising are transferred to the group's translation reserve as a separate component of equity and are reported within the consolidated statement of changes in equity. All other exchange differences are included within the consolidated income statement in the year. Intercompany foreign exchange differences are included in operating profit unless deemed to be as permanent as equity in which case are included in reserves.

 

Operating profit

Operating profit is defined as the profit for the year from continuing operations after all operating costs and income but before finance income, finance costs, and taxation. Operating profit is disclosed as a separate line on the face of the income statement.

 

Normalised operating profit is the same as the above but excludes non-recurring items, for example profit on the sale of property. Normalised operating profit is reconciled to operating profit on the face of the income statement.

 

Other gains and losses

Other gains and losses are material items that arise from unusual non-recurring events. They are disclosed separately, in aggregate, on the face of the income statement after operating profit where, in the opinion of the directors, such disclosure is necessary in order to fairly present the results for the financial period.

 

Finance costs

Finance costs are recognised in the income statement on the accruals basis in the year in which they are incurred.

 

 

3. Use of critical accounting assumptions and estimates

Estimates and judgements are continually evaluated and assessed based on historical experience and other factors, including expectations of future events that are believed to be reasonable given the circumstances prevailing when the accounts are approved.

 

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The area where the group considers estimates and assumptions to have a significant risk of causing material adjustment to the carrying value of assets and liabilities.is is in the valuation of investment properties.

 

 

4. Segmental information

 

Revenue continuing operations

Operating profit (loss) continuing operations

Depreciation and loss (profit) on sale of plant and equipment

EBITDA

Net assets

 

£

£

£

£

£

Classes of business

 

 

 

 

 

Engineering:

 

 

 

 

 

2017

1,597,994

153,517

75,584

229,101

332,221

2016

1,425,101

(36,813)

76,912

40,099

183,086

Tourism and serviced units:

 

 

 

 

 

2017

4,526,769

687,217

953,427

1,640,644

6,770,202

2016

3,680,110

642,507

818,309

1,460,816

5,219,364

 

 

 

 

 

 

Investment and development property:

 

 

 

 

 

2017

1,282

40,311

34,734

75,045

4,087,975

2016

126,137

17,705

143,842

3,799,978

 

 

 

 

 

 

Management:

 

 

 

 

 

2017

-

(28,067)

(28,067)

2,167,055

2016

(698,371)

140

(698,231)

2,858,095

 

 

 

 

 

 

Total:

 

 

 

 

 

2017

6,126,045

852,978

1,063,745

1,916,723

13,357,453

2016

5,105,211

33,460

913,066

946,526

12,060,523

 

 

 

 

 

 

Geographical segments

 

 

 

 

 

United Kingdom:

 

 

 

 

 

2017

1,688,040

116,807

75,584

192,391

850,407

2016

1,515,725

(468,844)

77,052

(391,792)

530,105

 

 

 

 

 

 

Africa:

 

 

 

 

 

2017

4,436,723

403,162

953,427

1,356,589

6,603,227

2016

3,589,486

276,840

818,309

1,095,149

5,107,786

 

 

 

 

 

 

Malta and Rest of the World:

 

 

 

 

 

2017

1,282

333,009

34,734

367,743

5,903,819

2016

225,464

17,705

243,169

6,422,632

 

 

 

 

 

 

Total:

 

 

 

 

 

2017

6,126,045

852,978

1,063,745

1,916,723

13,357,453

2016

5,105,211

33,460

913,066

946,526

12,060,523

 

 

5. Investment activities and other income

 

2017

 

2016

 

£

 

£

Current asset investments valuation movement

426,784

 

(201,054)

Investment and development property valuation movement

297,836

 

351,580

(Increase) in provision on current asset investments

(12,135)

 

(32,735)

Net foreign exchange gain - inter-company loans

805,578

 

157,842

Net foreign exchange (loss) - monetary items

(549,740)

 

(151,333)

Income from current asset investments

50,846

 

91,907

 

1,019,169

 

216,207

6. Finance income

 

2017

 

2016

 

£

 

£

Bank deposits

4,336

 

25,846

 

 

7. Finance costs

 

2017

 

2016

 

£

 

£

Bank loans

442,897

 

448,980

Finance leases

654

 

8,869

 

443,551

 

457,849

 

 

8. Profit (loss) before taxation

The following have been charged (credited) in arriving at the profit (loss) before taxation:

 

2017

 

2016

 

£

 

£

Depreciation - owned assets

1,063,102

 

918,850

Depreciation - finance leased assets

-

 

1,366

Loss (profit) on sale of plant and equipment

643

 

( 5,854)

Operating lease rental payments

32,368

 

44,121

Net foreign exchange (gain)

( 255,838)

 

( 6,509)

 

 

9. Auditors' remuneration

A detailed analysis of auditors' remuneration on a worldwide basis is as follows:

 

2017

 

2016

 

£

 

£

Auditor's fees

 

 

 

- statutory audit of the consolidated accounts

29,175

 

28,975

- statutory audit of the group's subsidiaries

9,000

 

9,000

- interim review

9,550

 

9,280

 

 

 

 

Overseas auditors' fees

 

 

 

- statutory audit

27,542

 

23,398

 

 

10. Employee information

The average number of employees employed during the year was:

 

2017

 

2016

Management

21

 

22

Administration

14

 

14

Production

119

 

110

 

154

 

146

 

Staff costs, including directors' remuneration:

 

2017

 

2016

 

£

 

£

Wages and salaries

1,943,703

 

1,540,094

Social security costs

171,919

 

133,872

Pensions (defined contribution schemes)

7,585

 

5,215

 

2,123,207

 

1,679,181

 

 

Total directors' emoluments were as follows:

 

Fees

Salary

Total emoluments

 

2017

2017

2017

 

2016

 

£

£

£

 

£

Charles Bailey

30,014

354,699

384,713

 

145,482

Sir William McAlpine, Bt.

24,000

-

24,000

 

18,000

David Wilkinson

30,000

-

30,000

 

12,000

Christopher Fielding

24,000

-

24,000

 

24,000

 

108,014

354,699

462,713

 

199,482

 

 

 

 

 

 

The number of directors accruing retirement benefits under defined contribution schemes

 

 

1

 

1

 

The group does not operate any profit share or bonus schemes for directors.

 

 

11. Taxation

 

2017

 

2016

 

£

 

£

Current tax - overseas tax based on taxable profit for the year

60,332

 

48,807

Deferred tax (credit) on the origination and reversal of temporary differences

6,544

 

(20,692)

Total tax charge for the financial year attributable to total operations

66,876

 

28,115

 

The tax charge for the financial year can be reconciled to the profit before tax per the income statement multiplied by the standard applicable corporation tax rate in the UK of 20% as follows:

 

 

2017

 

2016

 

 

£

 

£

Profit (loss) before taxation

408,274

 

(398,543)

Tax at the UK effective corporation tax rate of 20% (2016: 20%)

 

81,655

 

(79,709)

Effects of:

 

 

 

Non-deductible expenses

10,134

 

9,232

Movement in overseas trading losses and effect of different overseas tax rates

 

230,242

 

44,822

Differences arising on capital sales and investment income

(85,776)

 

37,852

Deferred tax on losses not recoverable

(168,223)

 

7,354

Effect of change in tax rate

(1,156)

 

8,564

Total tax charge for the financial year

66,876

 

28,115

 

12. Earnings (loss) per share

The earnings per share has been calculated by reference to the weighted average number of ordinary shares of 10p each in issue of 7,637,031 (2016: 7,609,083) which excludes own shares held. The share options in issue have no dilutive effect on the weighted average number of ordinary shares.

 

Continuing earnings

Number of shares

2017

 

 

Basic earnings / weighted average number shares

341,489

7,637,031

 

 

 

Basic earnings per share (pence)

 4.47p

 

 

 

 

2016

 

 

Basic earnings / weighted average number shares

(426,314)

7,609,083

 

 

 

Basic earnings per share (pence)

 (5.60p)

 

 

13. Property, plant and equipment

 

Freehold land and buildings

Leasehold land and buildings under 50 years

Plant and equipment

Investment and development property

Total

 

£

£

£

£

£

 Cost

 

 

 

 

 

 At 1 April 2016

2,246,523

9,794,062

3,564,617

2,098,769

17,703,971

 Exchange differences

323,467

1,103,355

361,304

162,973

1,951,099

 Additions

52,729

559,451

136,546

373,002

1,121,728

 Valuation movement

-

-

-

297,836

297,836

 Disposals

-

( 2,487)

( 104,340)

-

( 106,827)

 At 31 March 2017

2,622,719

11,454,381

3,958,127

2,932,580

20,967,807

 

 

 

 

 

 

 Depreciation

 

 

 

 

 

 At 1 April 2016

12,655

2,712,244

2,151,517

-

4,876,416

 Exchange differences

4,433

243,747

213,615

-

461,795

 Charge for year

18,401

522,941

514,320

7,440

1,063,102

 Disposals

-

-

( 98,322)

-

( 98,322)

 At 31st March 2017

35,489

3,478,932

2,781,130

7,440

6,302,991

 

 

 

 

 

 

 Carrying value

 

 

 

 

 

2017

2,587,230

7,975,449

1,176,997

2,925,140

14,664,816

2016

2,233,868

7,081,818

1,413,100

2,098,769

12,827,555

 

At 31 March 2017 the group's carrying value of plant and equipment held under finance leases and similar agreements was £Nil (2016: £8,198).

 

At 31 March 2017 the group did not have any non-cancellable contractual commitments for the acquisition of property, plant and equipment.

 

On 15 May 2017, the group purchased a freehold property at Glendale Crescent, Claremont, South Africa for R7,661,792 (£450,590).

 

 On 15 May 2017, the group purchased a freehold property at Palmyra Road, Claremont, South Africa for R2,532,362 (£148,928).

 

 

14. Investments in subsidiary undertakings

Company

£

At 31 March 2015

1,487,644

Disposal and impairment provisions

(252,670)

At 31 March 2016

1,234,974

Disposal and impairment provisions

(252,787)

At 31 March 2017

982,187

 

A list of the significant investments in subsidiaries, including the country of incorporation, is given in note 34.

 

 

15. Trade and other receivables

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Prepayments and accrued income

115,200

153,600

 

115,200

153,600

Social security and other taxes

825,161

541,017

 

-

-

 

940,361

694,617

 

115,200

153,600

 

16. Deferred tax asset

 

Tax losses recognised

Unremitted overseas earnings

Short term timing differences

Total

 

£

£

£

£

Group

 

 

 

 

At 1 April 2016 at 19%

274,210

(44,205)

1,752

231,757

Exchange differences

10,804

-

462

11,266

Credited to income statement

35,886

(9,231)

2,541

29,196

At 31 March 2017 at 19%

320,900

(53,436)

4,755

272,219

 

 

 

 

 

Company

 

 

 

 

At 1 April 2016 at 19%

231,509

(44,205)

-

187,304

Credited to income statement

27,097

(9,231)

-

17,866

At 31 March 2017 at 19%

258,606

(53,436)

-

205,170

 

Deferred tax at 31 March 2017 has been calculated using the substantively enacted rate of tax that is expected to apply when timing differences reverse. At 31 March 2017 the group had unused capital losses of £429,325 (2016: £427,420) available for offset against future capital gains. The utilisation of capital losses is only recognised following the actual crystallisation of a taxable gain. The deferred tax asset is expected to be recovered after more than 12 months. Deferred tax assets have not been recognised in respect of tax losses where it is uncertain that future taxable profits will be available, against which the group can utilise them.

 

 

17. Inventory

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Raw materials and consumables

26,035

19,851

 

-

-

 

 

18. Trade and other receivables

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Trade debtors

1,695,033

1,506,622

 

-

-

Amounts recoverable on long term contracts

146,065

137,981

 

-

-

Loans to group undertakings

-

-

 

4,505,394

4,534,206

Other debtors

637,719

123,169

 

8,000

10,976

Operating leases

33,494

143,263

 

-

-

Prepayments and accrued income

250,721

192,274

 

49,853

49,957

Social security and other taxes

383,404

231,062

 

6,372

4,631

 

3,146,436

2,334,371

 

4,569,619

4,599,770

 

 

19. Current asset investments

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Listed investments

1,311,556

1,504,486

 

353,683

235,599

Unlisted investments

6,001

18,136

 

6,000

6,000

 

1,317,557

1,522,622

 

359,683

241,599

 

Investments are carried at fair value at the balance sheet date.

 

 

20. Cash and cash equivalents

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Cash at bank and in hand

1,120,919

1,969,385

 

550,311

555,909

Deposit accounts

215,256

213,840

 

-

-

 

1,336,175

2,183,225

 

550,311

555,909

 

Deposit accounts comprise short term bank deposits with an original maturity of three months or less.

 

 

21. Trade and other payables

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Trade creditors

341,199

352,330

 

33,348

44,063

Deferred consideration on long term contracts

868,834

917,557

 

-

-

Loans from group undertakings

-

-

 

303,543

222,446

Social security and other taxes

253,178

213,971

 

26,615

25,678

Directors' loans

160,684

21,044

 

8,059

19,590

Accruals and deferred income

220,340

275,230

 

44,176

107,949

Other creditors

631,505

507,153

 

300,339

300,354

 

2,475,740

2,287,285

 

716,080

720,080

 

 

22. Borrowings

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Current liabilities

 

 

 

 

 

Bank loans and overdrafts

2,315,981

2,049,180

 

305,841

245,901

 

 

 

 

 

 

Non- current liabilities

 

 

 

 

 

Bank loans

3,698,065

3,413,624

 

-

-

 

 

 

 

 

 

Bank loans

 

 

 

 

 

Over one year and under two years

2,337,989

2,264,726

 

-

-

Over two years and under five years

785,787

1,148,898

 

-

-

Over five years

574,289

-

 

-

-

 

3,698,065

3,413,624

 

-

-

 

Bank loans

 

Tanzania

South Africa

Malta

2017

 

2016

Current liabilities

 

 

 

£

 

£

Bank loans

1,280,861

2,573

-

1,283,434

 

1,595,210

 

 

 

 

 

 

 

Non-current liabilities

 

 

Over one year and under two years

2,246,810

27,167

64,012

2,337,989

 

2,264,726

Over two years and under five years

551,362

106,402

128,023

785,787

 

1,148,898

Over five years

-

37,870

536,419

574,289

 

-

 

2,798,172

171,439

728,454

3,698,065

 

3,413,624

 

 

 

 

 

 

 

Total loans

4,079,033

174,012

728,454

4,981,499

 

5,008,834

 

 

 

Loan profile

Bank

Type

Rate

Maturity date

2017

 

Loan

Base currency

Tanzania

 

 

 

£

 

$

 

I&M Bank Kenya

Fixed loan

6.25%

31/07/2019

2,618,531

 

3,289,678

US Dollar

I&M Bank Tanzania

Fixed loan

8.00%

31/10/2021

1,460,502

 

1,834,839

US Dollar

 

 

 

 

4,079,033

 

5,124,517

 

 

 

 

 

 

 

 

 

South Africa

 

 

 

£

 

R

 

Nedbank Limited

Fixed loan

10.50%

30/11/2026

174,012

 

2,937,160

SA Rand

 

 

 

 

 

 

 

 

Malta

 

 

 

£

 

Eu

 

Lombard Bank Malta

Fixed loan

4.00%

30/09/2025

728,454

 

853,502

Euro

 

All other group bank borrowings are at a floating charge based on the relevant LIBOR equivalent.

 

At the 31 March 2017 the group had £6,988,166 (2016: £7,202,872) of committed facilities of which £6,014,046 (2016: £5,462,804) was utilised.

 

The group's UK bank loans are secured by a charge over certain assets of the group and by cross guarantees between the UK undertakings. These borrowings at 31 March 2017 were £375,861 (2016: £453,970). Industrial Investment Corporation Limited has provided guarantees of £500,000 to Barclays Bank plc in respect of UK bank borrowings.

 

Cordura Limited (Tanzania) had borrowings at 31 March 2017 of £4,079,033 (2016: £5,008,834) secured by a fixed and floating charge over its assets. Industrial Investment Corporation Limited has provided guarantees of $500,000 in respect of Tanzanian bank borrowings and provided a promissory note for $900,000 as security for an overdraft. CH Bailey Plc has provided a guarantee in respect of Tanzanian bank borrowings.

 

Industrial Investment Corporation SA Property Proprietary Limited had borrowings at 31 March 2017 of £174,012 (2016: £Nil) secured by a fixed charge over the freehold property in South Africa.

 

IIC (Malta) Ltd had borrowings at 31 March 2017 of £728,454 (2016: £Nil) secured by a fixed and floating charge over its assets.

 

 

23. Obligations under finance leases

 

Group

 

Company

 

2017

2016

 

2017

2016

 

£

£

 

£

£

Amounts payable under finance leases:

 

 

 

 

 

Within one year

-

2,234

 

-

-

Over one year and under five years

-

-

 

-

-

 

-

2,234

 

-

-

Less future finance charges

-

(300)

 

-

-

Present value of lease obligations

-

1,934

 

-

-

Current liabilities

-

-

 

-

-

Non-current liabilities

-

1,934

 

-

-

 

The carrying value of obligations under finance leases approximates to the present value of minimum lease payments.

 

 

 

24. Provisions

 

Legal

 

£

Group

 

At 1 April 2016

225,000

Utilised

(3,435)

Charged to income statement

3,435

At 31 March 2017

225,000

 

 

Company

 

At 1 April 2016

225,000

Utilised

(3,435)

Charged to income statement

3,435

At 31 March 2017

225,000

 

 

25. Deferred tax liabilities

 

Revaluation surplus

 

£

Group

 

At 1 April 2016

42,190

Exchange differences

3,276

Charged to income statement

35,740

At 31 March 2017

81,206

 

Deferred tax has been calculated using the substantively enacted rate of tax that is expected to apply when timing differences reverse. The deferred tax liability is expected to be recovered after more than 12 months.

 

 

26. Called-up share capital

 

2017

 

2016

 

£

 

£

Issued and fully paid:

 

 

 

8,335,413 ordinary shares of 10p each

833,541

 

833,541

 

On 21 September 2016, the company issued 10,863 ordinary shares of 10 pence to the directors in lieu of fees payable of £14,340. On 14 March 2017, the company issued 8,419 ordinary shares of 10 pence to the directors in lieu of fees payable of £11,113. The company retains as treasury shares 685,229 shares of 10 pence at a cost of £904,502 (2016: 704,511 shares of 10 pence at a cost of £929,955). The company did not buy back any shares for cancellation during the year. At 31 March 2017, the company has one class of ordinary shares, which carry no right to fixed income. The share options outstanding have been recognised in accordance with IFRS 2. The movements in share options were as follows:

 

Number

 

Market price and date of exercise

Outstanding at 31 March 2016 and 31 March 2017

45,000

 

£2.00

 

 

 

 

Exercisable at 31 March 2016 and 31 March 2017

-

 

 28th June 2016 to 28th June 2023

 

 

27. Share capital and reserves

 

Called-up share capital

Share premium account

Capital redemption reserve

 Investment in own shares

Translation reserve

Retained earnings

Minority interest

Total

 

£

£

£

£

£

£

£

£

Group

 

 

 

 

 

 

 

 

At 1 April 2016

833,541

609,690

5,163,332

(929,955)

54,470

6,328,290

1,155

12,060,523

Sale of investment in own shares

-

-

-

-

-

24,489

-

24,489

Cost of investment in own shares

-

-

-

25,453

-

(25,453)

-

-

Profit for the financial year

-

-

-

-

-

341,489

(91)

341,398

Exchange differences

-

-

-

-

4,492

926,461

90

931,043

At 31 March 2017

833,541

609,690

5,163,332

(904,502)

58,962

7,595,276

1,154

13,357,453

 

 

 

 

 

 

 

 

 

Company

 

 

 

 

 

 

 

 

At 1 April 2016

833,541

609,690

5,163,332

(929,955)

-

105,567

-

5,782,175

Sale of investment in own shares

-

-

-

-

-

24,489

-

24,489

Cost of investment in own shares

-

-

-

25,453

-

(25,453)

-

-

(Loss) for the financial year

-

-

-

-

-

(271,415)

-

(271,415)

At 31 March 2017

833,541

609,690

5,163,332

(904,502)

-

(166,812)

-

5,535,249

 

The translation reserve represents the cumulative translation differences on the foreign currency net investments since the date of transition to IFRS.

 

 

28. Cash generated from operations

 

2017

 

2016

 

£

 

£

Operating profit continuing operations

852,978

 

33,460

Depreciation

1,063,102

 

919,920

Loss (profit) on the sale of property, plant and equipment

643

 

(5,854)

Current asset investments valuation movement

(426,784)

 

201,054

Investment and development property valuation movement

(297,836)

 

(351,580)

Provision on current asset investments

12,135

 

32,735

Exchange differences

(70,124)

 

(433,966)

Cash generated from operations before movements in working capital

1,134,114

 

395,769

Operating leases

(151,755)

 

(54,421)

(Increase) in inventories

(6,184)

 

(6,133)

(Increase) in trade and other receivables

(457,809)

 

(606,289)

Increase (decrease) in trade and other payables

48,815

 

(9,475)

Cash generated from operations

567,181

 

(280,549)

 

 

29. Analysis of net funds (debt)

 

2017

 

2016

 

£

 

£

Cash and cash equivalents

1,336,175

 

2,183,225

Bank loans and overdrafts

(2,315,981)

 

(2,049,180)

 

(979,806)

 

134,045

Bank loans - non-current

(3,698,065)

 

(3,413,624)

Obligations under finance leases

-

 

(1,934)

Net (debt) funds

(4,677,871)

 

(3,281,513)

 

 

 

30. Financial instruments

 

Capital risk management

The group manages capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of debt and equity balance. The capital structure of the group consist of debt, which is analysed in note 29, and equity comprising issued share capital, reserves and retained earnings as disclosed in note 27. The gearing ratio is:

 

2017

 

2016

 

£

 

£

Net (debt) funds

(4,677,871)

 

(3,281,513)

Equity

13,357,453

 

12,060,523

Net funds (debt) to equity percentage

(35.0%)

 

(27.2%)

 

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset and liability are disclosed in note 2 to the financial statements.

 

Categories of financial instruments

 

 

 

2017

 

2016

 

 

 

£

 

£

Cash and cash equivalents

 

 

1,336,175

 

2,183,225

Bank loans and overdrafts - current

 

 

(2,315,981)

 

(2,049,180)

Bank loans - non-current

 

 

(3,698,065)

 

(3,413,624)

Obligations under finance leases

 

 

-

 

(1,934)

Net funds (debt)

 

 

(4,677,871)

 

(3,281,513)

Current assets investments

 

 

1,317,557

 

1,522,622

Other net operating assets

 

 

16,717,767

 

13,819,414

Total net assets

 

 

13,357,453

 

12,060,523

 

 

 

 

 

 

Net funds (debt)

Sterling

 

(23,358)

 

26,551

 

Euro

 

(519,298)

 

(3,947,246)

 

US Dollar

 

(4,141,545)

 

757,342

 

Japanese Yen

 

-

 

(68,149)

 

South African Rand

 

81

 

89,706

 

Swiss Franc

 

-

 

(150,605)

 

Tanzanian Shilling

 

6,249

 

10,888

 

 

 

(4,677,871)

 

(3,281,513)

 

 

 

 

 

 

Current asset investments

Sterling

 

359,686

 

278,943

 

Euro

 

36,031

 

117,085

 

US Dollar

 

879,325

 

928,452

 

Japanese Yen

 

26,039

 

58,637

 

Swiss Franc

 

16,476

 

139,505

 

 

 

1,317,557

 

1,522,622

 

The directors consider that the fair value of all assets and liabilities is not materially different from the book value.

 

Financial risk management

The key risks that potentially impact on the group's results are credit risk, liquidity risk, interest rate risk and currency risk. The group's exposure to each of these risks and the management of that exposure is discussed below. There has been no change during the year, or since the year end to the type of financial risks faced by the group or to the management of those risks.

 

Credit risk management

Credit risk refers to the risk that a customer will default on its contractual obligations resulting in financial loss to the group. The group has adopted a policy of only dealing with creditworthy customers as a means of mitigating the risk of financial loss from defaults. Creditworthiness is verified by independent rating agencies when available. Credit exposure is controlled by credit limits that are reviewed and approved by senior management on a regular basis.

 

Trade receivables consist of a large number of customers spread across diverse industries and geographical locations. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The group does not have any significant credit risk exposure to any single counterparty or connected counterparties at the reporting date. The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the group's maximum exposure to credit risk.

 

Liquidity risk management

The group manages liquidity risk by maintaining adequate cash reserves, by operating within its agreed banking facilities and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of monetary assets and liabilities.

 

Interest rate risk management

The group's activities expose it to the financial risks of changes in interest rates, however, interest charged on bank loans of $5,124,517 is at fixed rates of 6.25% and 8%, R2,937,160 is at a fixed rate of 10.5% and 853,502 euros is at a fixed rate of 4%. Other group interest charged on bank loans is at floating rates based on the relevant LIBOR equivalent and the group endeavours to obtain the most competitive rates available.

 

Currency risk management

The group's policy is not to hedge its international assets with respect to foreign currency balance sheet translation exposure, nor against foreign currency transactions. The group generally does not enter into forward exchange contracts and it does not use financial instruments for speculative purposes.

 

 

31. Operating lease arrangements

At the balance sheet date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases that fall due as follows:

 

2017

 

2016

 

£

 

£

Within one year

32,368

 

44,425

In the second to the fifth year inclusive

-

 

-

 

32,368

 

44,425

 

Property lease payments represent rentals payable by the group for certain of its operating locations and offices. Leases are negotiated over various terms to suit the particular requirements at that time. Break clauses are included wherever appropriate and the above liability has been calculated from the balance sheet date to either the end of the lease or the first break clause, whichever is the earlier.

 

 

32. Related party transactions

At 31 March 2017, the group owed Charles Bailey £160,684 (2016: £21,044) on which there was no interest charged to the income statement (2016: £Nil).

 

Transactions between the company and its subsidiary undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

 

 

33. Dividend payments

 

2017

 

2016

 

Per share

Total

 

Per share

Total

 

Pence

£

 

Pence

£

Final dividend for the year ended 31 March 2015 declared on 8 September 2015 and paid to shareholders on the register as at 23 October 2015 on 16 November 2015

-

-

 

 20p

 1,521,551

 

The directors do not propose to pay a final dividend in respect of the year ended 31 March 2017 (2016: £Nil).

 

 

34. Significant investment in subsidiaries

 

 

Percentage of ordinary share capital held

Principle activities

 

 

Industrial:

 

 

 

 

 

Bailey Industrial Engineering Limited (UK)

100%

Engineering

 

 

 

 

 

 

 

 

Leisure:

 

 

 

 

 

Bay Travel Limited (UK)

100%

Travel agency

 

 

 

Industrial Investment Corporation SA Property Proprietary Limited (South Africa)

100%

Tourism

 

 

 

Leonardo Da Vinci Knowledge Tourism Ltd (Malta)

99%

Property development

 

 

 

IIC (Malta) Ltd (Malta)

100%

Property development

 

 

 

Cordura Limited (Tanzania)

100%

Tourism and serviced units

 

 

 

Kimbiji Bay Limited (Tanzania)

100%

Property development

 

 

 

 

 

 

 

 

Other activities:

 

 

 

 

 

Industrial Investment Corporation Limited (Bermuda)

100%

Holding company

 

 

 

Kimbiji Bay Limited (Malta)

100%

Holding company

 

 

 

Shareholder Information

 

 

Five Year Financial Summary

 

 

2017

2016

2015

2014

2013

 

 £

 £

 £

 £

 £

Continuing operations

 

 

 

 

 

Revenue

6,126,045

5,105,211

4,927,562

4,380,696

5,312,962

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

Operating profit (loss) before exceptional items, investments activities and depreciation

897,554

730,319

(75,334)

12,889

319,535

Investment activities and other income

1,019,169

216,207

202,109

(469,412)

478,979

Depreciation

(1,063,102)

(918,920)

(920,216)

(654,622)

(726,610)

(Loss) profit on sale of plant and equipment

(643)

5,854

-

(518)

4,300

Profit on sale of property

-

-

8,160,535

-

 -

 

852,978

33,460

7,367,094

(1,111,663)

76,204

Net finance costs

(444,704)

(432,003)

(489,801)

(296,743)

(273,574)

Profit (loss) before taxation

408,274

(398,543)

6,877,293

(1,408,406)

(197,370)

Taxation

(66,876)

(28,115)

(969,082)

5,676

(11,832)

Minority interest

91

344

(70,310)

1,882

(425)

Profit (loss) for the financial year

341,489

(426,314)

5,837,901

(1,400,848)

(209,627)

 

 

 

 

 

 

Earnings (loss) per share

 4.47p

 (5.60p)

76.74p

(18.41p)

(2.76p)

 

 

Notice of Annual General Meeting

 

Notice is hereby given that the ninety-third annual general meeting ("AGM") of C.H. Bailey plc will be held at the Sofitel Hotel, Terminal 5 London Heathrow Airport, Hounslow, Middlesex TW6 2GD on the 11th September 2017 at 2.00pm.

 

A copy of the Notice of AGM together with the Annual Report will be available on the Company's website at www.chbaileyplc.co.uk and will be posted to shareholders along with the Company's Annual Report in due course.

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR EAEPAEENXEAF
12
Date   Source Headline
6th Feb 20193:14 pmRNSResult of GM
14th Jan 20197:00 amRNSProposed Cancellation, Tender Offer & Notice of GM
7th Dec 20187:00 amRNSHalf-year Report
11th Sep 20183:56 pmRNSResult of AGM
3rd Aug 20187:00 amRNSFinal Results
6th Jun 20189:11 amRNSLease Agreement for property in Malta
16th May 20187:00 amRNSRevaluation of 30 St Barbara Bastion, Malta
9th Apr 20184:34 pmRNSDirector/PDMR Shareholding
16th Mar 201810:54 amRNSHolding(s) in Company
7th Mar 20187:00 amRNSDirectorate announcement
7th Mar 20187:00 amRNSDisposal of 16 Charles Street
14th Dec 20177:00 amRNSHalf-year Report
14th Nov 20177:00 amRNSCompany Secretary Change
13th Nov 20171:31 pmRNSConditional disposal of Maltese asset
27th Sep 201710:52 amRNSDirector/PDMR Shareholding
12th Sep 20179:02 amRNSResult of AGM
3rd Aug 20177:00 amRNSFinal Results
14th Mar 201711:30 amRNSDirector/PDMR Shareholding
21st Dec 20167:00 amRNSHalf-year Report
21st Sep 201612:19 pmRNSDirector/PDMR Shareholding
14th Sep 20169:35 amRNSResult of AGM
8th Aug 20169:01 amRNSAnnual Report & Accounts 2016
20th Apr 20163:18 pmRNSDirector/PDMR Shareholding
11th Mar 201611:30 amRNSIssuance of treasury shares and Director dealing
21st Dec 20157:00 amRNSHalf Yearly Report
9th Dec 20157:00 amRNSDirector appointment
8th Sep 20152:25 pmRNSResult of AGM
3rd Aug 20157:01 amRNSPreliminary Results for year ended 31 March 2015
3rd Aug 20157:00 amRNSDirector appointment
1st Apr 20154:19 pmRNSAcquisition
18th Mar 20157:00 amRNSDisposal
23rd Dec 201412:52 pmRNSDirector/PDMR Shareholding
18th Dec 20147:00 amRNSHalf Yearly Report
30th Jul 20147:00 amRNSPreliminary Results - Year ended 31 March 2014
19th Dec 20137:00 amRNSHalf Yearly Report
10th Sep 20134:32 pmRNSResult of AGM
24th Jul 20137:00 amRNSPreliminary Results - Year ended 31 March 2013
23rd May 20133:22 pmRNSDirector Shareholding
12th Apr 20137:00 amRNSPayment of deposit on remaining property in Malta
18th Dec 20127:00 amRNSInterim Results
12th Oct 201212:27 pmRNSResult of AGM
20th Sep 201211:44 amRNSHolding(s) in Company
19th Sep 20127:00 amRNSPreliminary Results- year ended 31 March 2012
13th Jun 20124:21 pmRNSDirector appointment and Directors' share dealings
11th Jun 20123:50 pmRNSAcquisition
16th Dec 20117:00 amRNSCapital Reorganisation
14th Dec 20117:00 amRNSInterim Results
9th Sep 201112:18 pmRNSREVISED TERMS OF SALE OF PROPERTY IN MALTA
5th Aug 20113:17 pmRNSHolding(s) in Company
21st Jul 20117:00 amRNSFinal Results
12

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