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Half-year Report

21 Dec 2016 07:00

RNS Number : 4052S
Bailey(C.H.) PLC
21 December 2016
 

C H Bailey plc

21 December 2016

 

Chairman's statement and unaudited financial results

for the six months ended 30th September 2016

 

CH Bailey plc ("CH Bailey", the "Company" or, together with its subsidiaries, the "Group"), announces its interim results for the half year ended 30 September 2016.

 

Key Highlights

 

· Turnover up 22% to £2.9m (2015: £2.4m).

 

· Operating profit of £577k (2015 loss: £494k), assisted by foreign exchange gains and performance of current asset investments.

 

· EBITDA at £1.1m (2015: loss of £70k).

 

· Overall profit for the period of £361k (2015: loss £717k).

 

· Retail and offices in Tanzania at 85% occupancy and serviced accommodation increasing in line with two year plan.

 

· Development of St Lucia Street property in Malta nearing completion and refurbishment of Galenia Estate hospitality unit completed.

 

Interim Statement and Results

 

Our interim results for the 6 month period ended 30 September 2016 show a profit for the period of £381,000 (2015: loss £717,000). Revenue has increased by 22% to £2.9m (2015: £2.4m) with cost of sales increasing by 16% to £2.0m (2015:£1.8m). This has resulted in an operating profit for the period of £577,000 (2015: loss £494,000). EBITDA has risen from a small loss of £52,000 to earnings for the period of £1.1m.

 

These improved results arise from a combination of increased sales from the serviced offices and accommodation in Tanzania, profits on our current asset investments and the positive effect of the slide in the value of the pound.

 

The Phase III of our offices in Tanzania is now fully let and we have seen a build up throughout the period in the occupancy of our new serviced accommodation in Dar es Salaam. Despite a turbulent time for engineering in South Wales, Bailey Industrial Engineering Limited ("BIE") has traded in line with our internal forecasts.

 

During the period we have been working on the development at St Lucia Street in Valletta, Malta, which is nearing completion, and have refurbished the hospitality unit at Montagu in South Africa.

 

Overhead costs have generally been kept in line with the prior period, although the pre-revenue planning work in Malta coupled with additional overheads incurred in South Africa in connection with the renovation of the hospitality unit ready for occupancy have resulted in administrative expenses increasing from £761,000 in the same period last year to £944,000 this time.

 

 

Tanzania

 

Despite significant economic uncertainty in Tanzania, the Phase III offices are now fully let, with our overall office and retail occupancy in Dar es Salaam now at over 85%.

 

Our new serviced accommodation, the Oyster Bay Suites, has been building occupancy levels during the period. These have continued to climb in the two months since the period end and in line with our internal forecast that it would take two years for the product to become established in the market.

 

By contrast, although the quality of our accommodation continues to be recognised with various awards, the hospitality business in Tanzania (The Oyster Bay and Beho Beho) has remained subdued, primarily due to the imposition of VAT on tourist revenue, which has made it difficult to compete with similar offerings in other countries, such as Kenya. However, these leisure assets represent less than 20% of our revenue in Tanzania.

 

South Africa

 

We are pleased with progress at our hospitality unit outside Montagu, now re-named the Galenia Estate. Following its refurbishment over the low season, it has been able to maintain similar occupancy levels to those seen previously, but at a much enhanced room rate.

 

We continue to discuss our approach to the Galenia Estate and Little Bean Farm sites with local planning authorities and we believe that both have significant long term development potential.

 

The appointment of Marinus Venter, with his African property sector background, as Head of Development and Operations, has added impetus to our search for additional development opportunities in the Western Cape of South Africa and we have identified several interesting development properties.

 

Malta

 

Valletta continues to exhibit increasing demand for well-appointed office and residential property. The refurbishment of the St Lucia Street property is nearing completion and we are starting to market it, as single or multiple tenant office space. We are also considering various options to generate income from the property on St Barbara Bastions.

 

We have received MEPA planning consent for the Charles Street property and are hoping to receive consent for the Archbishop Street property in the New Year. We expect to start development work on one of these as soon as St Lucia Street is generating income.

 

 

UK Operations

 

Bailey Industrial Engineering in Newport has faced many challenges associated with the sector in that part of the world. However, recent months have seen an improvement in orders as the TATA plant at Port Talbot came back after a period of inactivity, due to the threat of closure, and other client orders also picked up. The result is revenue only 7% down from the previous period and with improved margins and controlled overhead costs, the business produced a 134% increase in operating profit, from £17,000 in the prior period to £40,000.

 

The future remains uncertain, but TATA and the potential of work arising from the go ahead for Hinkley Point give cause for a more positive view. Our lease at Newport expires in 2017 and, as a result, we are currently considering our options.

 

 

Outlook

 

Market conditions have been difficult in several of our sectors, with the effect of the oil and gas prices and general economic uncertainty. During the first six months of this financial year, this was offset by newer revenue streams coming on line and by the fact that almost all of our non-UK revenue is denominated in US dollars, with many costs and much of our borrowing in local currencies. This has resulted in a significant foreign currency benefit. We are cautious about prospects, as there are few signs that economic uncertainty will reduce in the short term and currencies may not remain in our favour.

 

We therefore continue to keep costs under review, whilst looking for ways to increase the value of our existing property assets. We are also seeking interesting property trading and development opportunities in more buoyant markets, where we have market knowledge and connections, such as the Western Cape.

 

The key focus of your Group is on leisure and commercial operations and properties in Tanzania, South Africa and Malta. I am confident that the Group is well placed in these countries to add value for shareholders.

 

 

David Wilkinson

21 December 2016

 

Further information:

 

Bryan Warren, Company Secretary

C H Bailey Plc

Tel: 01633 262961

 

James Felix / Ciaran Walsh

Arden Partners plc

Tel: 020 7614 5900

 

  

Consolidated Income Statement

for the six months ended 30 September 2016

 

 

 

 

 

Notes

September

 

September

 

March

 

 

2016

 

2015

 

2016

 

 

£

 

£

 

£

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

 

Revenue

4

2,923,756

 

2,395,441

 

5,105,211

Cost of sales

 

(2,042,291)

 

(1,767,144)

 

(3,576,420)

Gross profit

 

881,465

 

628,297

 

1,528,791

 

 

 

 

 

 

 

Administrative expenses

 

(944,185)

 

(761,232)

 

(1,711,538)

Investment activities and other income

5

639,630

 

(360,588)

 

216,207

Operating profit (loss)

 

576,910

 

(493,523)

 

33,460

 

 

 

 

 

 

 

EBITDA*

 

1,100,589

 

(51,924)

 

946,526

Depreciation

 

(523,071)

 

(440,767)

 

(918,920)

(Loss) profit on sale of plant and equipment

(608)

 

(832)

 

5,854

Operating profit (loss)

 

576,910

 

(493,523)

 

33,460

 

 

 

 

 

 

 

Finance income

6

901

 

14,103

 

25,846

Finance costs

7

(215,185)

 

(239,012)

 

(457,849)

Profit (loss) before taxation

 

362,626

 

(718,432)

 

(398,543)

Taxation

 

(1,869)

 

945

 

(28,115)

Minority interest

 

59

 

305

 

344

Profit (loss) for the financial period

 

360,816

 

(717,182)

 

(426,314)

 

 

 

 

 

 

 

Earnings (loss) per share from continuing and total operations

8

4.73p

 

(9.43p)

 

(5.60p)

 

 

 

 

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

 

 

Consolidated Statement of

Comprehensive Total Income

for the six months ended 30 September 2016

 

 

 

 

September

 

September

 

March

 

2016

 

2015

 

2016

 

£

 

£

 

£

 

 

 

 

 

 

Profit (loss) for the financial period

360,816

 

(717,182)

 

(426,314)

Items that may be reclassified to profit and loss:

 

 

 

 

 

Exchange differences

822,397

 

(1,654,433)

 

(1,543,976)

Total comprehensive income for the period

1,183,213

 

(2,371,615)

 

(1,970,290)

 

 

 

 

 

 

 

 

Consolidated Balance Sheet

as at 30 September 2016

 

 

 

Notes

September

 

September

 

March

 

 

2016

 

2015

 

2016

 

 

£

 

£

 

£

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

9

14,461,315

 

12,455,865

 

12,827,555

Operating leases

 

92,979

 

35,175

 

87,626

Trade and other receivables

 

855,895

 

620,217

 

694,617

Deferred tax asset

 

268,460

 

187,272

 

231,757

 

 

15,678,649

 

13,298,529

 

13,841,555

Current assets

 

 

 

 

 

 

Inventory

 

19,976

 

15,622

 

19,851

Trade and other receivables

 

2,708,367

 

1,997,833

 

2,334,371

Current asset investments

10

1,755,653

 

1,889,234

 

1,522,622

Cash and cash equivalents

13

1,771,745

 

4,418,838

 

2,183,225

 

 

6,255,741

 

8,321,527

 

6,060,069

Assets classified as held for sale

 

197,811

 

171,850

 

178,112

 

 

6,453,552

 

8,493,377

 

6,238,181

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

(3,033,874)

 

(2,292,295)

 

(2,287,285)

Bank loans and overdrafts

13

(2,067,491)

 

(1,663,368)

 

(2,049,180)

Other loans

13

-

 

(793,787)

 

-

Obligations under finance leases

 

-

 

(17,181)

 

(1,934)

Provisions

 

(225,000)

 

(225,000)

 

(225,000)

 

 

(5,326,365)

 

(4,991,631)

 

(4,563,399)

Net current assets

 

1,127,187

 

3,501,746

 

1,674,782

Total assets less current liabilities

 

16,805,836

 

16,800,275

 

15,516,337

Non-current liabilities

 

 

 

 

 

 

Bank loans

13

(3,503,549)

 

(3,652,976)

 

(3,413,624)

Obligations under finance leases

 

-

 

-

 

-

Deferred tax liabilities

 

(46,013)

 

-

 

(42,190)

Net assets

 

13,256,274

 

13,147,299

 

12,060,523

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Called-up share capital

11

833,541

 

833,541

 

833,541

Share premium account

609,690

 

609,690

 

609,690

Capital redemption reserve

5,163,332

 

5,163,332

 

5,163,332

Investment in own shares

 

(915,616)

 

(960,509)

 

(929,955)

Translation reserve

 

59,535

 

50,978

 

54,470

Retained earnings

 

7,504,591

 

7,449,574

 

6,328,290

Surplus attributable to the parent's shareholders

 

13,255,073

 

13,146,606

 

12,059,368

Minority interest

 

1,201

 

1,093

 

1,155

Total equity

 

13,256,274

 

13,147,699

 

12,060,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Cash Flow Statement

for the six months ended 30 September 2016

 

 

 

Notes

September

 

September

 

March

 

 

2016

 

2015

 

2016

 

 

£

 

£

 

£

Cash flows from operating activities

 

 

 

 

 

 

Cash generated from operations

12

625,669

 

30,868

 

(281,549)

Interest paid

 

(215,185)

 

(239,012)

 

(457,849)

Overseas tax paid

 

(30,380)

 

(17,452)

 

(48,807)

Net cash flow from operating activities

 

380,104

 

(225,596)

 

(788,205)

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Sale of property, plant and equipment

 

6,586

 

11,330

 

32,304

Purchase of property, plant and equipment

 

(779,658)

 

(2,194,701)

 

(2,263,358)

Sale of investments

 

22,186

 

117,431

 

809,533

Purchase of investments

 

(21,372)

 

(574,800)

 

(949,787)

Interest received

 

901

 

14,103

 

25,846

Net cash flow from investing activities

 

(771,357)

 

(2,626,637)

 

(2,345,462)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Equity dividends paid

 

-

-

 

(1,521,551)

Dividend to minority interest

 

-

-

 

-

Investment in own shares

 

12,492

 

-

 

32,988

Movement in bank loans

 

(268,823)

 

(625,876)

 

(1,083,462)

Movement in directors' loans

 

222,155

 

(15,533)

 

(18,636)

Movement in other loans

 

-

 

793,787

 

-

Movement in capital element of finance leases

(1,934)

 

(14,947)

 

(30,194)

Net cash flow from financing activities

 

(36,110)

 

137,431

 

(2,620,855)

 

 

 

 

 

 

 

Net (decrease) in cash and cash equivalents

 

(427,363)

 

(2,714,802)

 

(5,754,522)

Cash and cash equivalents at beginning of period

134,045

 

5,321,954

 

5,321,954

Exchange differences

 

(2,428)

 

148,318

 

566,613

Cash and cash equivalents at end of period

13

(295,746)

 

2,755,470

 

134,045

 

 

 

 

 

 

 

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

 

 

Net (decrease) in cash and cash equivalents

 

(427,363)

 

(2,714,802)

 

(5,754,522)

Net cashflow from the movement in debt

 

270,757

 

(152,964)

 

1,113,656

Movement in net (debt) during the period

 

(156,606)

 

(2,867,766)

 

(4,640,866)

Net (debt) funds at the beginning of period

 

(3,281,513)

 

933,933

 

933,933

Exchange differences

 

(361,176)

 

225,359

 

425,420

Net (debt) at the end of period

13

(3,799,295)

 

(1,708,474)

 

(3,281,513)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

for the six months ended 30 September 2016

 

 

 

 

 

 

 

 

 

 

 

 

Called-up share capital

Share premium account

Capital redemption reserve

Investment in own shares

Translation reserve

Retained earnings

Minority interest

Total

 

£

£

£

£

£

£

£

£

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 on investment in own shares

-

-

-

-

-

32,988

-

32,988

Cost of investment in own shares

-

-

-

30,554

-

(30,554)

-

-

Income statement

 

 

 

 

 

 

 

 

(Loss) for the financial period

-

-

-

-

-

(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 on investment in own shares

-

-

-

-

-

12,492

-

12,492

Cost of investment in own shares

-

-

-

14,439

-

(14,439)

-

-

Income statement

 

 

 

 

 

 

 

 

Profit for the financial period

-

-

-

-

-

360,816

(59)

360,757

Items that may be reclassified to profit and loss

 

 

 

 

 

 

Exchange differences

-

-

-

-

5,065

817,332

105

822,502

At 30 September 2016

833,541

609,690

5,163,332

(915,516)

59,535

7,504,491

1,201

13,256,274

 

 

 

 

 

 

 

 

 

 

.

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.

 

Basis of preparation

These interim 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 interim 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 sales 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.

 

Accounting period

The current period is for the six months ended 30 September 2016 and the comparative period is for the six months ended 30 September 2015.

 

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.

 

 

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 2016. 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. Deferred tax is provided on unremitted earnings from overseas subsidiaries where it is probable that these earnings will be remitted to the UK in the foreseeable future. Deferred tax is measured 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, other than those designated as "assets at fair value through the profit and loss" 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. In accordance with IFRS 1, the translation reserve has been set to zero at the date of transition to IFRS.

 

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 directors are not aware of any estimates and assumptions that have significant risk of causing a material adjustment to the carrying value of assets and liabilities.

 

 

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:

 

 

 

 

 

September 2016

730,468

40,043

39,000

79,043

233,063

September 2015

781,372

17,104

39,000

56,104

251,905

March 2016

1,425,101

(36,813)

76,912

40,099

183,086

 

 

 

 

 

 

Tourism and serviced units:

 

 

 

 

 

September 2016

2,189,324

367,718

473,430

841,148

6,312,883

September 2015

1,614,069

203,988

402,529

606,517

5,937,012

March 2016

3,680,110

642,507

818,309

1,460,816

5,219,364

 

 

 

 

 

 

Investment and development property:

 

 

 

 

 

September 2016

3,964

(88,289)

11,249

(77,040)

4,025,896

September 2015

-

-

-

-

-

March 2016

-

126,137

17,705

143,842

3,799,978

 

 

 

 

 

 

Management:

 

 

 

 

 

September 2016

-

257,438

-

257,438

2,684,432

September 2015

-

(714,615)

70

(714,545)

6,958,782

March 2016

-

(698,371)

140

(698,231)

2,858,095

 

 

 

 

 

 

Total:

 

 

 

 

 

September 2016

2,923,756

576,910

523,679

1,100,589

13,256,274

September 2015

2,395,441

(493,523)

441,599

(51,924)

13,147,699

March 2016

5,105,211

33,460

913,066

946,526

12,060,523

 

 

 

 

 

 

Geographical segments

 

 

 

 

 

 

 

 

 

 

 

United Kingdom:

 

 

 

 

 

September 2016

774,970

16,814

39,000

55,814

827,884

September 2015

840,731

(135,605)

39,070

(96,535)

1,984,024

March 2016

1,515,725

(468,844)

77,052

(391,792)

530,105

 

 

 

 

 

 

Africa:

 

 

 

 

 

September 2016

2,144,822

112,932

473,430

586,362

6,048,740

September 2015

1,554,710

27,767

394,309

422,076

3,719,519

March 2016

3,589,486

276,840

818,309

1,095,149

5,107,786

 

 

 

 

 

 

Malta and Rest of the World:

 

 

 

 

 

September 2016

3,964

447,164

11,249

458,413

6,379,650

September 2015

-

(385,685)

8,220

(377,465)

7,444,156

March 2016

-

225,464

17,705

243,169

6,422,632

 

 

 

 

 

 

Total:

 

 

 

 

 

September 2016

2,923,756

576,910

523,679

1,100,589

13,256,274

September 2015

2,395,441

(493,523)

441,599

(51,924)

13,147,699

March 2016

5,105,211

33,460

913,066

946,526

12,060,523

 

 

5. Investment activities and other income

 

September

 

September

 

March

 

2016

 

2015

 

2016

 

£

 

£

 

£

 

 

 

 

 

 

Income from current asset investments

78,195

 

72,459

 

91,907

Profit (loss) on sale of current asset investments

20,733

 

(9,497)

 

(37,098)

(Increase) in provision on current asset investments

(12,135)

 

(32,735)

 

(32,735)

Net foreign exchange gain (loss)

327,589

 

(248,755)

 

6,509

Current assets investment valuation movement

225,248

 

(142,060)

 

(163,956)

Investment and development property valuation movement

-

 

-

 

351,580

 

639,630

 

(360,588)

 

216,207

 

 

 

6. Finance income

 

September

 

September

 

March

 

2016

 

2015

 

2016

 

£

 

£

 

£

Bank deposits

901

 

14,103

 

25,846

 

 

7. Finance costs

 

September

 

September

 

March

 

2016

 

2015

 

2016

 

£

 

£

 

£

Bank loans

214,553

 

234,473

 

448,980

Finance leases

632

 

4,539

 

8,869

 

215,185

 

239,012

 

457,849

 

 

 

8. 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 7,631438 (September 2015: 7,607,755) (March 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.

 

9. 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

2,265,823

9,794,062

3,564,617

2,098,769

17,723,271

 Exchange differences

283,907

1,002,328

325,203

190,161

1,801,599

 Additions

49,820

553,893

52,907

123,038

779,658

 Disposals

-

( 2,463)

( 5,037)

-

( 7,500)

 At 30 September 2016

2,599,550

11,347,820

3,937,690

2,411,968

20,297,028

 

 

 

 

 

 

 Depreciation

 

 

 

 

 

 At 1 April 2016

31,955

2,712,244

-

2,151,517

4,895,716

 Exchange differences

3,481

221,429

-

192,322

417,232

 Charge for year

13,738

256,972

-

252,361

523,071

 Disposals

-

-

-

( 306)

( 306)

 At 1 April 2016

49,174

3,190,645

-

2,595,894

5,835,713

 

 

 

 

 

 

 Carrying value

 

 

 

 

 

 September 2016

2,550,376

8,157,175

3,937,690

(183,926)

14,461,315

 March 2016

2,233,868

7,081,818

3,564,617

(52,748)

12,827,555

 

 

 

 

 

 

 

 

 

 

 

 

 

10. Current asset investments

 

September

 

September

 

 March

 

2016

 

2015

 

 2016

 

£

 

£

 

 £

Listed investments

1,749,653

 

1,862,098

 

1,504,486

Unlisted investments

6,000

 

 27,136

 

18,136

 

1,755,653

 

1,889,234

 

1,522,622

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

11. Called-up share capital

 

September

 

September

 

March

 

2016

 

2015

 

2016

 

£

 

£

 

 £

Issued and fully paid:

 

 

 

 

 

8,335,413 ordinary shares of 10p each

833,541

 

833,541

 

833,541

 

 

The company retains as treasury shares 693,648 ordinary shares of 10 pence at a cost of £915,616. The company did not buy back any shares for cancellation during the year. The company has one class of ordinary shares, which carry no right to fixed income.

 

 

 

12. Cash generated from operations

 

 

September

 

September

 

March

 

 

2016

 

2015

 

2016

 

 

£

 

£

 

£

Operating profit (loss) continuing operations

576,910

 

(493,523)

 

33,460

Depreciation

523,071

 

440,767

 

918,920

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

608

 

832

 

(5,854)

(Profit) loss on sale of current asset investments

(20,733)

 

9,497

 

37,098

Fair value movement of investments

(225,248)

 

142,060

 

(187,624)

Provision on current asset investments

12,135

 

32,735

 

32,735

Exchange differences

(234,447)

 

106,860

 

(433,966)

Cash generated from operations before movements in working capital

632,296

 

239,228

 

394,769

Operating leases

4,338

 

(3,137)

 

(54,421)

(Increase) decrease in inventories

(125)

 

(1,904)

 

(6,133)

(Increase) in trade and other receivables

(535,274)

 

(195,751)

 

(606,289)

Increase (decrease) in trade and other payables

524,434

 

(7,568)

 

(9,475)

Cash generated from operations

625,669

 

30,868

 

(281,549)

 

 

 

13. Analysis of net funds (debt)

 

September

 

September

 

March

 

2016

 

2015

 

2016

 

£

 

£

 

£

Cash and cash equivalents

1,771,745

 

4,418,838

 

 2,183,225

Bank loans and overdrafts

(2,067,491)

 

(1,663,368)

 

 (2,049,180)

 

 (295,746)

 

2,755,470

 

134,045

Bank loans - non-current

(3,503,549)

 

(3,652,976)

 

(3,413,624)

Obligations under finance leases

 -

 

 (17,181)

 

 (1,934)

Other loans

-

 

(793,787)

 

-

Net (debt) funds

(3,799,295)

 

(1,708,474)

 

(3,281,513)

 

 

 

14. 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%

Operation of hotel

 

 

St. George's Bay Hotel Limited (Malta)

99%

Operation of hotel

 

 

Leonardo Da Vinci Knowledge Tourism Ltd (Malta)

99%

Property development

 

 

IIC (Malta) Ltd (Malta)

100%

Property development

 

 

Cordura Limited (Tanzania)

100%

Operation of hotel and safari camps

 

Kimbiji Bay Limited (Tanzania)

100%

Property development

 

 

 

 

 

 

 

Other activities:

 

 

 

 

 

Industrial Investment Corporation Limited (Bermuda)

100%

Holding company

 

 

Kimbiji Bay Limited (Malta)

100%

Holding company

 

 

 

 

 

 

 

 

 

 

 

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR AKKDNABDDOBB
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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