Henry Boot Regulatory News (BOOT)

21 Sep 2005 07:00

Boot(Henry) PLC21 September 2005 HENRY BOOT PLC INTERIM RESULTS Henry Boot PLC, the property and construction group, announces its InterimResults for the half year ended 30th June 2005. Enquiries: Jamie Boot, Group Managing Director - Tel.: 0114 255 5444 CHAIRMAN'S STATEMENT I am pleased to present the trading results for the first six months of 2005,and to report that these continue to show further improvement over previousyears. The momentum gained in 2004 has continued strongly into the current yearand, whilst competition remains intense, significant successes have beenachieved on all fronts. This applies particularly to our Property and Landactivity. Compared with last year's interim results restated under International FinancialReporting Standards (IFRS), turnover was £42.4m (2004: £26.4m) and pre-taxprofit was £7.7m (2004: £8.9m). The 2004 pre-tax profit figure benefited by £5mfrom the investment property revaluation undertaken under IFRS. The revaluationposition at 30 June 2005 is not considered to have moved further to any materialextent (£0.9m). At the trading level, therefore, prior to taking this uplift in investmentproperty value into account, the £2.9m increase in profitability over 2004reflects a significant 75% increase. After discounting the fair value increasesin investment properties, the adjusted earnings per share shows a rise of 45%from 11.0p in 2004 to 16.0p in 2005. Presentation of this year's interim results is the first to be dealt with by theGroup under the new IFRS, the adoption of which commenced on 1 January 2005. Inline with the requirements on interim reporting for UK listed entities, thecompany has chosen to comply with International Accounting Standard (IAS) 34 andhas not presented full IFRS Financial Statements. However, comparativeinformation for the current interim period and the preceding year ended 31December 2004 is also provided. There are a number of differences in respect of certain accounting treatmentsthat arise from the adoption of IFRS, and a statement as to the effects of thesewas published on Wednesday, 7 September 2005, and sent to shareholders. A copyof the statement can be downloaded from the Henry Boot website atwww.henryboot.co.uk, and is also available from the company's registered office.That statement is in the form of a reconciliation of the opening position, theinterim position and the year end position for 2004 under UK Generally AcceptedAccounting Principles (UK GAAP) and IFRS, with appropriate explanations of themovements therein. PROPERTY Our Property Development, Property Investment and Land Trading activity produceda solid result in the first six months of trading. The Property Development and Investment companies had an encouraging period.Major schemes were progressed further at the Ayr Central retail complex; TheAxis mixed-use development, Nottingham; The Mall shopping complex, Bromley;Waterloo Square retail development, South Shields; and Markham Vale businesspark, north Derbyshire. Principal Development sales completed in the periodincluded a retail scheme in Doncaster; a further land sale to Toyota on PrioryPark, Hull; and a final phase land sale at Wentworth Business Park, Sheffield.Further new schemes were identified as the market showed little, if any, signsof slowing down. A strategic move during the early part of the year to retain some of our schemesfor future rental and capital growth saw a number of developments move into ourproperty portfolio, resulting in an increase in retained rentals. Overall,investment yields have remained keen and, with the possible introduction of realestate investment trusts (REITs) in the near future, the general consensus isthat the sector should remain strong. Hallam Land Management Limited started the year with a further tranche of landsales at Prestonpans and other major transactions at Bathgate, Blackpool andCleland. A number of further opportunities for increasing its contribution toGroup results have been identified for the second half of the year. The presentfairly flat housing market appears to have had very little impact in dampeningdemand for land. Moreover, a recent consultation paper has been published bythe Office of the Deputy Prime Minister setting out the Government's objectivesfor delivering a better supply of land for housing, and points to thereintroduction of the requirement for local planning authorities to identify afive-year supply of developable land sufficient to cover their requirements asset out in regional spatial strategies. It will hopefully lead to a more marketresponsive planning system. We await the publication of a revised 'PlanningPolicy Guidance 3: Housing' due later this year, but continue to be wary of thepossible introduction of a development land tax. CONSTRUCTION The turnover of our Construction company fell below expectation, althoughprofitability was maintained for the period. The 2004 result benefited fromsettlement of some long outstanding accounts which were not repeated in 2005.There was a slower release of prison alliance work and framework contracts to usthan anticipated, but this was largely compensated for by general localauthority work and existing prison, school and hospital workloads. Ofparticular note was the presentation of a top UK environmental award to ourvisitor centre project at Water's Edge Country Park, Barton-upon-Humber.Looking ahead, 50% of the order book for 2006 has already been secured. Road Link (A69) Holdings Limited, our construction PFI company, achieved robustreturns despite inclement weather early in the year that brought about severeflood damage and road disruption in the Carlisle area. Banner Plant Limited traded well in the period, with both utilisation and hirerates ahead of the previous year. The regional power tool centres were all inprofit, and the principal access and accommodation outlets put in strongperformances. FINANCIAL POSITION, DIVIDENDS AND OUTLOOK The Consolidated Balance Sheet now incorporates the pension scheme liabilitiesunder IAS 19 (Employee Benefits), but remains healthy. Net total groupborrowings remain minimal and, with those relating to our PFI operation (£8.1m)being ring-fenced, we are ideally placed to take advantage of the property andland opportunities that have been created. The situation is most encouraging and in the light of this, and their confidencein the year end outturn, your Directors are recommending an increase of justover 10% in the interim dividend from 4.4p per share to 4.9p per share. We lookforward to another highly successful year end. John S Reis, Chairman21 September 2005 Consolidated Income Statement (unaudited)for half year ended 30th June 2005 Half year ended Half year ended Year ended 30th June 30th June 31st December 2005 2004 2004 £'000 £'000 £'000 Revenue 42,408 26,411 84,346 Cost of sales (29,827) (18,054) (60,872)Gross profit 12,581 8,357 23,474 Other income 12 542 121 Administrative expenses (4,685) (4,574) (7,664) Pension expenses (1,240) (1,104) (2,064) 6,668 3,221 13,867 Increase in fair value of investment properties 919 4,984 9,448Profit from operations 7,587 8,205 23,315 Investment income 875 421 1,270 Finance costs (745) (271) (2,050) Share of profit of associate - 512 670Profit before tax 7,717 8,867 23,205 Taxation (2,319) (2,589) (6,213)Profit for the period from continuing operations 5,398 6,278 16,992 Attributable to: Equity holders of the parent 4,752 6,278 16,507 Minority interest 646 - 485 5,398 6,278 16,992Basic earnings per ordinary share 18.5p 24.6p 64.6p Diluted earnings per ordinary share 18.2p 24.1p 63.3p Note: Dividend 4.9p 4.4p 16.4p Consolidated Balance Sheet (unaudited)at 30th June 2005 30th June 31st December 30th June 2005 2004 2004 £'000 £'000 £'000ASSETSNon-current assetsGoodwill 3,900 4,002 -Property, plant and equipment 56,305 32,398 16,390Investment property 38,822 23,868 19,940Investments - 1 1,683Deferred tax assets 10,013 10,097 7,174 109,040 70,366 45,187Current assetsInventories 73,512 98,647 88,056Trade and other receivables 10,991 10,309 36,641Cash and cash equivalents 20,871 32,878 8,140 105,374 141,834 132,837Total assets 214,414 212,200 178,024 EQUITY AND LIABILITIESEquityShare capital 3,005 3,005 3,005Revaluation reserve 3,673 3,673 2,239Retained earnings 101,861 99,991 96,320Other reserves 2,057 2,136 3,463Cost of shares held by ESOP trust (765) (849) (989) 109,831 107,956 104,038Minority interests 1,090 1,220 -Total equity 110,921 109,176 104,038 LIABILITIESNon-current liabilitiesBorrowings 10,463 11,044 10,000Employee benefits 32,884 32,437 23,912Deferred tax liabilities 5,550 5,274 3,975Provisions 1,125 958 519Total non-current liabilities 50,022 49,713 38,406 Current liabilitiesTrade and other payables 38,893 38,811 32,132Current tax liability 1,984 2,610 981Obligations under finance leases 119 446 834Borrowings 12,205 11,216 1,573Provisions 270 228 60Total current liabilities 53,471 53,311 35,580Total liabilities 103,493 103,024 73,986Total equity and liabilities 214,414 212,200 178,024 Business Segments (unaudited)for half year ended 30th June 2005 Half year ended 30th June 2005 Half year ended 30th June 2004 Inter- Inter- Share of External segment External segment associate's sales sales Total sales sales turnover Total £'000 £'000 £'000 £'000 £'000 £'000 £'000RevenueProperty and land development 17,444 32 17,476 5,781 139 - 5,920Construction 24,798 290 25,088 21,698 621 (1,403) 20,916Other 166 313 479 335 299 - 634 42,408 635 43,043 27,814 1,059 (1,403) 27,470Eliminations - (635) (635) - (1,059) - (1,059)Group turnover 42,408 - 42,408 27,814 - (1,403) 26,411 Total TotalResult £'000 £'000Property and land development 7,054 5,735Construction 2,986 4,953Other (2,453) (2,483)Segment result 7,587 8,025Share of profit of associate - 512 7,587 8,717Investment income 875 421Finance costs (745) (271)Profit before tax 7,717 8,867Taxation (2,319) (2,589)Profit for the period 5,398 6,278 Business Segments (cont'd)for half year ended 30th June 2005 Year ended 31st December 2004 Inter- Share of External segment associate's sales sales turnover Total £'000 £'000 £'000 £'000RevenueProperty and land development 34,883 196 - 35,079Construction 50,757 1,207 (1,878) 50,086Other 584 386 - 970 86,224 1,789 (1,878) 86,135Eliminations - (1,789) - (1,789)Group turnover 86,224 - (1,878) 84,346 TotalResult £'000Property and land development 17,292Construction 7,472Other (1,449)Segment result 23,315Share of profit of associate 670 23,985 Investment income 1,270Finance costs (2,050)Profit before tax 23,205Taxation (6,213)Profit for the period 16,992 For management purposes, the Group is currently organised into three businesssegments - Property and Land Development, Construction and Other. As operations are carried out entirely within the UK, there is no secondarysegmental information. Consolidated Cash Flow Statement (unaudited)for half year ended 30th June 2005 Half year ended Half year ended Year ended 30th June 30th June 31st December 2005 2004 2004 £'000 £'000 £'000Cash flows from operating activitiesProfit from operations 7,587 8,205 23,315Depreciation of property, plant and equipment 2,345 1,788 3,967Amortisation of intangible assets 102 - 68Revaluation increase in investment properties (919) (4,984) (9,448)Gain on disposal of property, plant and equipment (502) (627) (877) Operating cash flows before movements in working capital 8,613 4,382 17,025Increase in inventories (13,559) (13,955) (19,078)(Increase) decrease in receivables (514) 601 3,665Increase (decrease) in payables 273 (2,690) 3,442 Cash generated from operations (5,187) (11,662) 5,054Interest received 875 398 1,301Interest paid (734) (270) (2,155)Taxation (2,086) (1,708) (3,959) Net cash from operating activities (7,132) (13,242) 241 Cash flows from investing activitiesAcquisition of subsidiary - - (5,001)Cash at bank acquired with subsidiary - - 5,388Loans acquired with subsidiary - - (12,788)Sale of subsidiaries - 17,585 32,946Sale of investments 1 - -Purchase of property, plant and equipment (2,572) (2,456) (4,405)Proceeds on disposal of property, plant and equipment 1,482 1,640 2,493Dividends received from associate - - 270Interest paid on finance leases (11) - (41)Preference dividends paid (11) (11) (21) (1,111) 16,758 18,841Cash flows from financing activitiesDividends paid: ordinary shares (3,069) (2,757) (3,884) minorities (776) - - Repayments of obligations under finance leases (327) (476) (864) (4,172) (3,233) (4,748) Net increase in cash and cash equivalents (12,415) 283 14,334Opening net funds (debt) 10,172 (5,026) (5,026)Cash outflow from decrease in lease financing 327 476 864Closing net (debt) funds (1,916) (4,267) 10,172 Consolidated Statement of Changes in Equity (unaudited)at 30th June 2005 30th June 31st December 30th June 2005 2004 2004 £'000 £'000 £'000 Profit for financial period 4,752 16,507 6,278Equity dividends (3,076) (3,905) (2,767)Revaluation of group occupied properties - 1,824 773Actuarial gains (losses) on defined benefit pension scheme 195 (4,845) 761Movements in fair value of cash flow hedges (131) (971) -Share-based payments 135 160 -Adjustment re properties transferred to stock - (23) (86)Arising on employee share schemes - 130 -Movement in equity 1,875 8,877 4,959Equity at start of period 107,956 99,079 99,079Equity at end of period 109,831 107,956 104,038 NOTES 1. The interim financial information has been prepared in accordance with IAS 34 (Interim Financial Reporting) using accounting policies that are believed will apply when the company issues its first complete report of IFRS financial statements for the year ending 31st December 2005. These were addressed in the document accompanying the letter sent to shareholders dated 7th September 2005. 2. The financial information set out above does not comprise statutory accounts within the meaning of section 240, Companies Act 1985, and is unaudited. The results for the half year ended 30th June 2004 and the year ended 31st December 2004 have been extracted from the unaudited restatement of the Group's results set out in the document accompanying the letter sent to shareholders dated 7th September 2005. 3. Earnings per ordinary share are calculated on the weighted average number of shares in issue. 4. The interim dividend amounting to £1,253,000 (2004: £1,127,000) will be paid on 27th October 2005 to shareholders whose names are on the register at the close of business on 14th October 2005. The proposed interim dividend has not been approved at the balance sheet date and so has not been included as a liability in these financial statements. 5. At the Board Meeting on 20th September 2005 the directors formally approved the issue of these statements which have not been reviewed by the auditors. This information is provided by RNS The company news service from the London Stock Exchange