Craven House Capital Regulatory News (CRV)

21 Mar 2005 09:38

Medsea Estates Group PLC21 March 2005 For immediate release: 21 March 2005 MEDSEA ESTATES GROUP PLC PRELIMINARY RESULTS FOR THE YEAR TO 31ST DECEMBER 2004 HIGHLIGHTS• Successful AIM float • Turnover for the year increased by 80% to £14.08m (2003: £7.84m) • Pre-tax profits increased by 98% to £2.24m (2003: £1.13m) • Earnings per share of 2.01p • Euromed Investments established to broaden activities and establish exclusive deals with developers • Euromed's first development, Nuevo Torre Guil, launched this month Tony Gatehouse, Chairman, commented: "Last year confirmed that the Medsea Group is a major force in the Spanishproperty market. We have set ourselves another ambitious programme for 2005 but,as always, we believe it to be achievable and the Board looks forward todeveloping further in the coming years." For further information contact: Medsea Estates Group PLC Tony Gatehouse, Chairman Today: 0207 067 0700Juan Carlos Rodriguez Martinez, ChiefExecutive Thereafter: 0034 96 570 40 02 Beaumont Cornish Limited Roland Cornish 0207 628 3396 Weber Shandwick Square Mile Terry Garrett/ Alex White 0207 067 0700 CHAIRMAN'S REPORT FOR THE YEAR ENDING 31st DECEMBER 2004 The year 2004 confirmed that Medsea Estates Group PLC is a major force in theSpanish property market. We set ourselves a very ambitious programme and, as hasalways been the style of the Directors throughout the growth of Medsea, thisprogramme has been achieved. My congratulations to Juan Carlos Rodriguez Martinez, our Chief ExecutiveOfficer, whose safe hands and unlimited energy steered Medsea and its staff tothe best financial results to date. Looking forward to 2005, we intend to use our experience and expertise tocontinue our winning formula, always keeping it simple and doing the basicsextremely well. RESULTS For the year ended 31 December 2004, we achieved a profit on ordinary activitiesbefore taxation of £2,242,000 (2003: £1,129,000) on turnover of £14,082,000(2003: £7,843,000). Earnings per share amounted to 2.01p. These results were in line with our expectations, with the exception thatEuromed, which only finalised its first acquisition 13 December 2004, did notmake a contribution to the year. Overall, whilst the number of units was down on initial expectations because anumber of new competitor countries entered the market after September, theaverage contribution was ahead, with the focus on increasing income and businessefficiency. This is a pattern which we see continuing in the current year. LOCATIONS Our Costa Blanca North office is in the process of extending our coverage allthe way up to Valencia and the Orange Blossom Coast. In recent times, theValencia area has been well publicised by UK television programmes like Homes inthe Sun, and this is sure to create further demand from the public. New locations under serious consideration are Portugal and the Costa de la Luz.Portugal has been marketed successfully over many years and as the property lawsare very similar to Spain it is safe for overseas buyers. The Costa de la Luz isjust over the bridge which closely links the Portuguese Algarve to Spain and hasalso received good publicity from several UK television programmes. We believe,together with existing locations, this will give a level of coverage in Spainthat is unequalled by our main competitors. That will give Medsea the edge inattracting top UK and Irish agents.We have examined the potential to expand into other countries and while we havenot ruled out the possibility of broader diversification in the medium term, wefeel we should exercise caution as, in a number of other countries, there seemsto be some difficulty in establishing clear title deeds to land. AGENTS Towards the end of 2004, we signed up a number of new agents to Medsea. We arestarting to see clients coming through from these and will continue to monitorthe overall performance of our agency base, since we are looking for quality notquantity. We intend to introduce a scale of commission, depending onperformance, that will free up extra funds to pay performance bonuses to our topproducers. EUROMED INVESTMENTS Euromed Investments has been established to broaden the scope of our activities.Until now, the Group has entered into commission arrangements with developersand promoters to pre-sell properties under construction. We believe that we havenow achieved a sufficiently strong reputation and are of a size where we may beable to obtain exclusivity from some developers for the sale of properties inprime residential development locations, thereby acting in a promoter-type roleourselves. The developer gains by having all sales dealt with through a single,reputable agent. Euromed may in turn use other Group companies to sell theseproperties, and it is likely that sales will also arise through other localagents. This month sees the launch of Euromed's first product, the Frondosa Valleydevelopment in Nuevo Torre Guil, Murcia. Promilorci, S.L. a company in whichMedsea Estates Group holds a 13 per cent interest, has bought development rightsto 90 acres of land in Murcia, at a cost of €20 million (approximately £13.4million). Promilorci intends to develop up to 786 residential properties on thesite. Known as the Nuevo Torre Guil development it is within a large forested areajust six miles from the city of Murcia, one of the most important Spanishdestinations for national and international tourism. Medsea will superviseeverything related to the sales and marketing of the properties and Euromed,acting as principal agent, will begin marketing the development in the UK andIreland through its links with some 150 independent property agents. From the feedback we are getting, it is likely to be a "cracking success". We have located a prestigious location and offices for Euromed that should be upand running from the end of March. We anticipate investment funds being made available to extend our range ofexclusive marketing contracts from the present three. One idea to satisfy theSIPPS and SAPS market is to encourage the building of aparthotels in the rightlocations, that will make the possibility of letting a reality. PERSONNEL We are actively strengthening personnel across the board. This will free up thesales resources and ensure we are ready for the expected increase in clients,without losing any efficiency. Another priority is the need for a top professional marketing and publicityperson, who will get our particular messages across to both existing agents andpotential new agents, also to clients coming direct to our Property Shops, ourFinance Department and Euromed's new exclusive products. We are convinced theright person will accelerate our expansion programme. ISO 2001 Last year saw another landmark in Medsea's development. The Group undertookpreparation for ISO Certification. Its acquisition will re-inforce Medsea'smeticulous attention to processes and details. POTENTIAL ACQUISITION The Medsea Group is also actively looking to acquire a letting company in 2005,which we feel will further enhance the business. This will have a dual benefitas many potential buyers are choosing to bypass agents when looking to buy inSpain and are also keen to know the letting potential before purchase. Also,many use rental companies to find a property to stay in whilst looking aroundfor a property to purchase. PROSPECTS As set out above, we have set ourselves another ambitious programme for 2005,but as always we believe it to be achievable and the Board looks forward todeveloping further in the coming years. Tony Gatehouse21 March 2005 GROUP PROFIT AND LOSS ACCOUNTFOR THE PERIOD ENDED 31 DECEMBER 2004 Unaudited Total Total Notes 2004 2003 £'000 £'000 Turnover 14,082 7,843 Cost of sales (10,020) (5,666) Gross profit 4,062 2,177 Administrative expenses (1,595) (1,030) Operating Profit 3 2,467 1,147 Exceptional item 4 (219) - Interest receivable and similar income 8 1Interest payable and similar charges (14) (19) Profit on ordinary activities before taxation 2,242 1,129 Tax on profit on ordinary activities 5 (822) (397) Profit on ordinary activities after taxation 1,420 732 Minority interests (2) - Retained profit for the year 1,418 732 Earnings per shareBasic 2.01p 1.04p Continuing operations During 2004 Medsea Estates Almeria SL was acquired. None of the group'sactivities was discontinued during the above two financial years. GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE PERIOD ENDED 31 DECEMBER 2004 Unaudited 2004 2003 £'000 £'000Statement of total recognised gains and losses Profit for the financial year 1,418 732 Foreign exchange gain/(loss) 64 12 Unrealised surplus on revaluation of investment properties 29 126 Total recognised gains relating to the year 1,511 870 GROUP BALANCE SHEETAS AT 31 DECEMBER 2004 Unaudited 2004 2003 £'000 £'000 £'000 £'000 Fixed assetsIntangible assets 4 3Tangible assets 1,174 1,017Investments 92 - 1,270 1,020Current assetsStock 129 -Debtors 7,500 3,017Cash at bank and in hand 1,229 1,013 8,858 4,030Creditors: amounts falling due withinone year (4,772) (1,800) Net current assets 4,086 2,230 Total assets less current liabilities 5,356 3,250 Creditors: amounts falling due aftermore than one year (253) (298) Provisions for liabilities and charges (1,042) (410) 4,061 2,542 Capital and reservesShare capital 7,063 3Share premium 22 -Other reserve 173 120Revaluation reserve 98 126Merger reserve (7,058) -Profit and loss account 3,761 2,293Minority interests 2 -Shareholders' funds equity 4,061 2,542 GROUP CASHFLOW STATEMENTFOR THE PERIOD ENDED 31 DECEMBER 2004 Unaudited 2004 2003 £'000 £'000Reconciliation of operating profit to net cash inflow fromoperating activities Operating profit 2,467 1,147Exceptional items (219) -Depreciation 88 42Foreign exchange 75 -Amortisation of intangible fixed assets (64) -(Profit)/loss on sale of fixed assets (75) (34)(Increase)/decrease in debtors (3,102) (707)Increase in stock (129) -Increase in creditors 1,295 721Net cash inflow from operating activities 336 1,169 CASH FLOW STATEMENT Net cash inflow from operating activities 336 1,169 Returns on investments and servicing of finance (6) (18) Tax paid (440) (242) Capital expenditure and financial investment (81) 34 Acquisitions and disposals 277 - Management of liquid resources (92) - Net cash flow before financing (6) 943 Financing 222 (133) Increase in cash 216 810 Reconciliation of net cash flow to movements in net debt Increase in cash 216 810 Cash inflow from increase in debt (138) 65 78 875 Net debt at 1 January 2004 589 (286) Net debt at 31 December 2004 667 589 NOTES TO THE FINANCIAL STATEMENTFOR THE PERIOD ENDED 31 DECEMBER 2004 1. Basis of preparation The preliminary statement is not the company's statutory accounts. The auditorshave not yet reported on the accounts for the year ended 31 December 2004 andthose accounts have yet not been delivered to the Registrar of Companies. 2. Basis of consolidation The group accounts consolidate the accounts of Medsea Estates Group PLC and allits subsidiary undertakings drawn up to 31 December each year. Medsea EstatesGroup PLC acquired shares in Medsea UK Limited and all its subsidiaries on 16July 2004. The accounts have been prepared using merger accounting so that allthe combining entities results are shown from 1 January 2004 and included in thecomparatives. Medsea Estates Almeria SL was held outside of the legal group until 3 March 2004but was under common management and control up to that date. The accounts forthe year ended 31 December 2003 set out in the Accountants' Report for the AIMadmission, aggregate the profits, losses, assets and liabilities of MedseaEstates Almeria SL with those of the legal Group headed by Medsea Group SL. 3. Operating Profit UnauditedThe operating profit is arrived at after charging: 2004 2003 £'000 £'000 Depreciation of owned assets 86 46Depreciation of leased assets 2 7Profit on disposal of fixed assets (75) (34)Hire of equipment - operating leases - motor vehicles 509 551Hire of equipment - operating leases - land and buildings 32 19Auditors' remuneration 18 10 4. Exceptional itemsThese costs are the professional fees and other costs arising from the Group'sadmission to the Alternative Investment Market. 5. Taxation Unaudited 2004 2003Analysis of charge in the year £'000 £'000 Current tax:Spanish corporation tax on profits of the year 413 179UK corporation tax on profits of the year 67 -Deferred tax 342 218 -------- --------Tax on profit on ordinary activities 822 397 -------- -------- -------- -------- This information is provided by RNS The company news service from the London Stock Exchange