C.H. Bailey Plc Regulatory News (BLEY)

30 Sep 2005 07:00

Bailey(C.H.) PLC30 September 2005 CHAIRMAN'S STATEMENT AND FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH 2005 Overview 2004/5 2003/4 2002/3 Turnover - continuing operations 6,614,785 4,633,070 3,376,000Increase in turnover %%. 42.77% 37.23%Operating (loss) - continuing operations 941,088 977,925 2,622,000Reduction in Losses %%. 3.76% 62.70%Loss before tax 867,279 1,235,062 2,659,000Reduction in Losses %%. 29.77% 53.55%Loss per share 1.54p 2.70p 4.11pReduction in Losses %% 42.96% 34.30% Financial Highlights •Turnover continues to grow organically and by acquisition •Losses continue to be reduced Restructuring & Repositioning Highlights •Closure of the group's ship repair division •Sale of M.Y Welsh Liberty and Bute Dry Dock Cardiff •Move to the AIM market of the London Stock Exchange •Purchase of own shares from the Receivers of Barlow Clowes International •Acquisition of Modular Automation International Limited and Midway Precision Ltd •Recent successful £883,774 open offer to shareholders 2005 has been a busy year for the Group - we have seen the turnover excludingdiscontinued operations grow to £ 6,614,785 (2004: £4,633,070) an increase ofsome 42%. This increase has been through both organic growth and acquisition. Iam also pleased to report that we have again reduced the loss before taxation,which amounts to £867,279 (2004: £1,235,062), a reduction of some 30%. During the period, we closed ship repairing after 127 years of operation. Thiswas a difficult but financially sound decision. This year the Group alsorealised some £1.9m from the sale of MY Welsh Liberty and the Bute Dry Dock inCardiff, which has significantly reduced group borrowings. In August 2004, the Group moved to the Alternative Investment Market (AIM) ofthe London Stock Exchange and in October 2004, the Company purchased its ownshares from the Receivers of Barlow Clowes International. Some of these shareswere, until recently, held as Treasury Shares by the company. The release ofthis block of shares into the market through the recent open offer hasstrengthened the Group's balance sheet and provides more liquidity in theCompany's shares. As indicated at the time of the open offer, the Board isconsidering the benefits of moving to a single class of share, and is aiming toreport to shareholders on this at the forthcoming Annual General Meeting. The Board believes the benefits of restructuring and repositioning of the Groupwill continue to show in future growth in turnover and improving operatingmargins. EngineeringThe underlying performance of Specialist Heavy Engineers Ltd (SHE) has beenbetter than expected. The closure of ship repairing has allowed management tofocus on its core businesses. It is against this background that new marketshave been identified and our engineering division is actively seeking tostrengthen its position in those new markets. This, together with strengthenedfinancial and management controls, has seen revenues increase and marginsimprove. SHE is now much more strongly positioned and we aim to continue tomaintain this momentum and these improvements as it consolidates its position inthe key markets available to it. Midway Precision Ltd (Midway) in its first full year of trading has met itsrevenue targets. Midway complements SHE, and offers a greater and more preciserange of engineering services for our customers. Although Midway is in a morecompetitive engineering sector, helped by its association with SHE, it has beenable to and we believe will continue to enhance its market position and attractmore business from new customers. P & D Electrical Ltd (P&D) is a South Wales based electrical contractingcompany. During the period under review, it saw steep growth in revenues as newmarkets opened while ship repairing, once its core business, closed. The changesmade this year have re-positioned P&D for future growth. The acquisition of Modular Automation International Limited is increasinglyshowing more and more value to our shareholders. Based in Birmingham thiscompany is still one of the leaders in the high-end value added market ofAutomation and Solution providers. With Group support we see this companygrowing its turnover significantly, providing real benefits to the Group.Purchased part way through our financial year in January 2005, the true impactof Modular will not become apparent in the Group accounts until 2006. Overall the engineering division has not only restructured and repositioneditself but also emerged as a healthier operation, which we believe will continueto grow and provide increased revenues and move into profitability. This is adifficult market place with more and more global competition. However, with theGroup's depth of specialist engineering knowledge and management flexibility, weare confident that we can continue to maintain our position, trend and growth. Leisure and TravelThis division includes our hotel in Malta and the hotel and safari camps inTanzania together with Bay Travel Limited, which operates from offices in Londonand Newport, South Wales. Bay Travel acts as the co-ordinator for the Malta andTanzanian operations and as travel advisers for both private and corporateclients. Our hotel in Malta has again had a profitable year. The Hotel is situated on aprime site in St Georges Bay, Malta's only blue flag beach and is surrounded bya number of Malta's 5 star hotels. Our contract with EF language has beenextended for a further 5 years and we continue to offer a very popular serviceto the student market in Malta. During the year, Malta's overall tourist numbersfell but student arrivals increased and the government is now considering theimplications of this change for the tourist industry as a whole.Tanzania as a country continues to consolidate its position as one of Africa'smore successful reforming economies. This has had positive global resultscommercially, in particular for tourism, which has benefited our Groupoperations in the country. Beho Beho was extensively refurbished in 2003/4 and re-launched to the touristmarket in June 2004 as one the most exclusive safari camps in the Selous GameReserve and Tanzania. The response has been overwhelming and we continue tooperate at high guest occupancy. We are now exploring ways of enhancing andsupporting the new benchmark in tourism that this camp has set for SouthernTanzania. Mikumi Wildlife Camp saw an increase in revenues and occupancy by over 20% forthe year. The camp continues to trade profitably and maintain its position asthe premier destination in the area. We have seen a steady rise in overseastourists over the year and following this increase combined with the success ofBeho Beho, we will be undertaking a refurbishment programme to upgrade theoperation that will allow the camp to maintain its market position and increaseits overseas trade. The Oyster Bay Hotel shops continue to operate profitably with high occupancy.During the year work to the complex was completed and the new rental space waslet almost immediately, which has meant that we have been able to maintain a 90%occupancy of the available rentable area. It is hoped that during this year wewill be able to upgrade and improve the adjacent local council car park, whichwill enhance both the complex's and the Hotel site's future potential. As previously reported, the Board is evaluating the development and otheropportunities that exist in Malta and Tanzania. Discussions with potentialinternational, regional and local developers and financiers are moving forwardand studies are being undertaken in both locations. In Tanzania discussions areunderway to develop part of the site to provide office space adjacent to theexisting shops. The Group has applied for planning permission for such adevelopment. If successful, this may also be a catalyst for development of thewhole site. InvestmentsThe company continues to maintain a varied portfolio with expert fund managersin Europe and the USA. The Funds are maintained in Bonds, Stocks and Hedge fundsand the Group continues to receive good returns from these investments, althoughthey are affected by fluctuations in exchange rates, particularly for the USdollar. Holding these investments enables the Group to see out the variouscycles in its areas of operations and also to be able to invest in our variousdevelopment projects when required. OutlookClearly, the changes made during the period were necessary. Further changes,like the others, will be made in order to increase revenue and productivity inboth the short and long term. I believe the signs for the future are encouragingas the trend of the past two years continues with revenues increasing andmargins improving. Trading in the first five months of the current financialyear has either been in line with or exceeded management expectations, and weremain positive on the Group's prospects for the remainder of the year andbeyond. To get this far has been a team effort and I would personally like to thankmanagement, employees, advisors and their respective family members, who havealso provided their advice and support over the year and allowed the time neededto be given by those directly involved with the Group. We now have a more stable platform on which we can build for the future and I amconfident that with the current performance we will see your Group tradingprofitably by the end of the current financial year. Charles BaileyChairman and Managing Director 30th September 2005 PROFIT AND LOSS ACCOUNT The Directors of C H Bailey Plc, at a meeting held today considered thefinancial accounts for the year ended 31st March 2005 2005 2004 £ £Turnover - continuing operations 6,614,785 4,633,070Turnover - discontinued operations 199,936 - ---------- ----------Total Turnover 6,814,721 4,633,070 ========== ==========Operating (loss) (1,049,344) (1,152,903)Net Interest (payable) receivable (128,651) (82,159)Profit on disposal of fixed assets 594,719 -Restructuring costs (284,003) -(Loss) on ordinary activities before tax (867,279) (1,235,062)Taxation 73,432 (384,866)(Loss) on ordinary activities after tax (793,847) (1,619,928)Minority Interests 12,408 430(Loss) for the year (781,439) (1,619,498)Dividend nil nilRetained (loss) for the (781,439) (1,619,498)Earnings per share (1.54p) (2.70p) loss loss The Directors do not recommended the payment of a final dividend in respect ofthe year ended 31st March 2005 (2004: nil) B J Warren (Secretary)C H Bailey Plc BALANCE SHEETS AS AT 31ST MARCH 2005 Group Company 2005 2004 2005 2004 Fixed assetsIntangible assets 857,357 - 7,500 - Tangible assets 7,358,426 8,280,231 13,583 960,249Fixed investments - - 8,201,632 7,915,266 ---------- ----------- ---------- ---------- 8,215,783 8,280,231 8,222,715 8,875,515 ---------- ----------- ---------- ---------- Current assetsStocks and work in progress 771,957 109,258 - -Debtors 2,429,646 1,356,298 2,681,419 2,192,404Current investments 2,531,211 4,031,017 647,191 920,772Cash at bank and in hand 873,718 561,715 726,372 5,622 ---------- ----------- ---------- ---------- 6,606,532 6,058,288 4,054,982 3,118,798 Creditors: amounts falling due within one 5,372,877 3,733,421 5,935,490 4,277,665 ---------- ----------- ---------- ----------Net current assets (liabilities) 1,233,655 2,324,867 (1,880,508) (1,158,867) ---------- ----------- ---------- ---------- Total assets less currentliabilities 9,449,438 10,605,098 6,342,207 7,716,648Creditors: amounts falling due after more than one year 395,240 393,756 - -Provision for liabilities and charges 102,513 50,000 50,000 50,000 ---------- ----------- ---------- ----------Net assets 8,951,685 10,161,342 6,292,207 7,666,648 ========== =========== ========== ========== Financed by: Capital and reservesCalled up share capital 4,830,414 5,996,873 4,830,414 5,996,873Capital redemption reserve 1,166,459 - 1,166,459 -Investment in own shares (274,084) - (274,084)Revaluation reserve 1,705,051 2,377,481 - 687,424Other reserve 615,840 501,060 - -Profit and loss account 537,334 1,252,069 569,418 982,351 ---------- ----------- ---------- ---------- 8,581,014 10,127,483 6,292,207 7,666,648Minority interest 370,671 33,859 - - ---------- ----------- ---------- ---------- 8,951,685 10,161,342 6,292,207 7,666,648 ========== =========== ========== ========== Net assets per share 20.59p 16.94p 14.47p 12.78p GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2005 2005 2004Net cash (outflow) from operating activities (1,422,611) (908,655) Return on investments and servicing of finance:Interest received 42,583 25,752Interest paid (171,234) (107,911) ---------- ---------- (128,651) (82,159) Taxation (4,945) (5,068) Capital expenditure and financial investment:Purchase of tangible fixed assets (544,665) (371,715)Sale of tangible fixed assets 2,044,054 - ---------- ---------- 1,499,389 (371,715) AcquisitionsPurchase of Modular Automation Int Ltd (286,365) -Overdraft acquired from Modular Automation Int Ltd (385,234) -Other goodwill acquired (55,000) - (726,599) - --------- ----------Cash (outflow) before use of liquid resources and financing (783,417) (1,367,597) Equity dividends paid - - Management of liquid rescources:Purchase of investments (1,411,322) (3,438,531)Sale of investments 3,196,697 3,740,195Net (increase) in short term deposits (395,598) (485,032) ----------- ----------- 1,389,777 (183,368)FinancingInvestment in own shares (969,825) -Directors loans 934,594 -(Decrease) in other loans due within one year (79,626) (96,121)(Decrease) Increase in bank loans due after more than one year (68,738) 160,877Capital element of finance leases 114,920 - (68,675) 64,756 ---------- ----------Increase (decrease) in cash in the period 537,685 (1,486,209) ========== ========== EndSeptember 30th, 2005 This information is provided by RNS The company news service from the London Stock Exchange