Craven House Capital Regulatory News (CRV)

28 Sep 2007 07:05

Medsea Estates Group PLC28 September 2007 Medsea Estates Group PLC INTERIM RESULTS to 30th June 2007 Chairman's Statement Pre-tax profits for the period are £57,000 compared to £1,027,000 last year. The first six months of 2007 have seen Group revenues increase to £7,667,000compared to £5,267,000 in the first half of 2006, an increase of 45%. Similarly,underlying Profit before Tax improved by 37% from £1,027,000 to £1,407,000.Regrettably this encouraging performance has been off-set by the need to adjustfor a marked difference in our cancellation experience compared to thatreflected in the accounts at 31st December 2006. This difference was masked by aproblem with our database which was only recently identified and has now beenrectified. At the end of each accounting period, the company accrues commissions receivableand payable in respect of sales transactions confirmed by payment of deposits bypurchasers. However, not all depositors proceed with their purchase and so aprovision for cancellations is made against the level of commissions accrued.The provision is based on the pattern of cancellations experienced up until thetime at which the relevant financial statements are finalised. The actual cancellation experience in 2007 for sales prior to 31st December 2006has been significantly greater than that for which provision had been made, dueto delays in property construction in Italy. It has therefore been necessary toadjust both commission receivable and commission payable to reflect thesecancellations which might otherwise have been provided for at 31st December2006. The impact of these cancellations is to reduce profits before tax by£1,350,000. The pattern of cancellations in respect of sales made this year has now fallenback to the levels previously experienced. Indeed, cancellations in respect ofSpanish properties have dropped significantly below those of previous years. The reduction of £364,000 in the profits from Associates reflects the fact thatlast year the developments were at the peak of their sales cycle, and thereforethe number of properties currently available for sale has reduced. Basic earnings per share amounted to 0.14p compared to 0.96p last year. Dilutedearnings per share are 0.13p. In the first six months we sold 608 units against a budget of 603 and comparedto 424 last year. The value of property sold increased by £12.7M over theprevious year. We have budgeted to sell a further 580 units in the second half of this year.Currently we are on track to exceed this target. Tony GatehouseChairman For further information: HB CorporateEd Hutton/ Rachel Kane /Imran Ahmed 020 7510 8600 Threadneedle CommunicationsAlex White / Josh Royston 020 7936 9665 MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS UNAUDITED CONSOLIDATED INTERIM INCOME STATEMENTFOR THE PERIOD ENDED 30 JUNE 2007 Unaudited Unaudited Audited 6 months 6 months 12 months 30 Jun 30 Jun 31 Dec Notes 2007 2006 2006 £'000 £'000 £'000 Revenue 2 7,667 5,267 13,300Amendment to cancellation provision 3 (2,152) Cost of sales (5,080) (3,858) (8,849)Amendment to cancellation provision 3 802 Administrative expenses (1,395) (958) (2,229) Share of operating profit in associates 226 590 702 Finance income 4 1Finance expense (14) (14) (31) Profit before tax 57 1,027 2,894 Tax on profit 35 (350) (1,019) Profit for the period 92 677 1,875 Attributable to:Equity holders of the parent 97 688 1,880Minority interests (5) (11) (5) 92 677 1,875 Earnings per shareBasic 11 0.14p 0.96p 2.66pDiluted 11 0.13p 0.96p 2.66p None of the group's activities were acquired or discontinued during theabove periods. MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS UNAUDITED CONSOLIDATED INTERIM BALANCE SHEETAS AT 30 JUNE 2007 Unaudited Unaudited Audited 30 Jun 30 Jun 31 Dec Notes 2007 2006 2006 £'000 £'000 £'000 Non-current assetsOther intangible assets 4 6 4 6Property, plant and equipment 5 962 933 872Investments in associates 1,064 827 687Other investments - 7 - 2,032 1,771 1,565Current assetsInventories 192 309 301Trade and other 6 11,691 8,769 12,245receivablesCash and cash equivalents 1,672 555 944 13,555 9,633 13,490 Total assets 15,587 11,404 15,055 Shareholders' equityShare capital 10 7,798 7,063 7,063Share premium 22 22 22Other reserve 117 120 117Revaluation reserve 46 62 46Merger reserve (7,058) (7,058) (7,058)Retained earnings 5,489 4,299 5,446Minority interests (1) (2) 4 6,413 4,506 5,640 Non-currentliabilitiesLong-term borrowings 8 249 302 300Deferred tax 9 1,328 1,147 1,535 1,577 1,449 1,835 Current liabilitiesTrade and other payables 7 7,460 4,892 7,319Short-term borrowings 7 137 557 261 7,597 5,449 7,580 Total equity and liabilities 15,587 11,404 15,055 MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS Statement of Changes in Equity For the period ended 30 June 2007 Share Share Other Revaluation Merger Retained Minority Total capital premium reserves reserve reserve earnings interests Equity £ £ £ £ £ £ £ £ Balance at 1 January 2006 7,063 22 118 95 (7,058) 3,631 9 3,880 Profit for the period - - - - - 677 - 677Currency translation differences - - - - - (13) - (13)Minority interest - - - - - 11 (11) -Sales of revalued properties - - - (33) - 33 - -Foreign exchange differences - - 2 - - (40) - (38) Total recognised income and expense for the period 7,063 22 120 62 (7,058) 4,299 (2) 4,506 Balance at 30 June 2006 carried forward 7,063 22 120 62 (7,058) 4,299 (2) 4,506 Balance at 1 July 2006 bought forward 7,063 22 120 62 (7,058) 4,299 (2) 4,506 Profit for the period - - - - - 1,203 - 1,203Currency translation differences - - - - - (7) - (7)Minority interest - - - - - (11) 6 (5)Sales of revalued properties - - - (16) - 16 - -Foreign exchange differences - - (3) - - (54) - (57) Total recognised income and expense for the period 7,063 22 117 46 (7,058) 5,446 4 5,640 Balance at 31 December 2006carried forward 7,063 22 117 46 (7,058) 5,446 4 5,640 Balance at 1 January 2007 brought forward 7,063 22 117 46 (7,058) 5,446 4 5,640 Profit for the period - - - - - 97 (5) 92Currency translation differences - - - - - (54) - (54) Total recognised income and expense for the year 7,063 22 117 46 (7,058) 5,489 (1) 5,678 Issue of shares 735 - - - - - - 735 Balance at 30 June 2007 carried forward 7,798 22 117 46 (7,058) 5,489 (1) 6,413 MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS UNAUDITED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWSFOR THE PERIOD ENDED 30 JUNE 2007 Unaudited Unaudited Audited Notes 6 months 6 months 12 months 30 Jun 30 Jun 31 Dec 2007 2006 2006 £'000 £'000 £'000 Cash flows from operating activities Profit/(loss) before tax 57 1,027 2,894Adjustments for: Depreciation 61 61 121 Foreign exchange (52) (18) (90) Share of operating profit in associates (226) (590) (702) Finance income (4) - (1) Finance expense 14 14 31 Amortisation of intangible fixed assets - 1 3 (Profit)/loss on sale of property, plant and equipment - (62) (52) (Increase)/decrease in trade and other receivables 450 (2,052) (5,527) Decrease/(increase) in inventories 109 (127) (119) Increase/(decrease) in trade and other payables 140 1,581 4,056 Cash generated from operations 549 (165) 614 Tax on profits paid (219) (71) (164)Interest paid (14) (12) (31) Net cash from operating activities 316 (248) 419 Cash from investing activitiesInterest received 4 (2) 1Payments to acquire tangible fixed assets (153) (14) (107)Proceeds from the sale of fixed assets - 188 276Payments to acquire intangible assets - - (7)Acquisition of other investments - (3) - Net cash generated used in investing activities (149) 169 163 Cash from financing activitiesRepayment of long term loans (145) 404 352Share issues 735 - -Other loans (13) (41) (118)Capital element of finance lease payments (16) (4) 55 Net cash generated from financing activites 561 359 289 Net decrease in cash and cash equivalents 728 280 871 Cash and cash equivalents at the beginning of the period 944 73 73 Cash and cash equivalents at the end of the period 1,672 353 944 MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTSFOR THE PERIOD ENDED 30 JUNE 2007 1 Basis of preparation Medsea Estates Group PLC prepares its annual report and accounts on the basis ofInternational Financial Reporting Standards (IFRS) as adopted for use by the European Union (EU). The financial information presented herein has been prepared in accordancewith the accounting policies expected to be used in preparing the Medsea Estates Group PLC annual report and accounts for the year ended 31 December 2007, which do not differ significantly from those used for the Medsea Estates Group PLC annual report and accountsfor the year ended 31 December 2006. The financial information shown in this half year review is unaudited and does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial statements for the year ended 31 December 2006, which were prepared under UK GAAP, have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under Section 237 (2) or (3) of the Companies Act 1985. These are the Group's first IFRS consolidated interim financial statements as part of the first full year of reporting under IFRS and have been prepared in accordance with IAS34 Interim Finanancial Reporting. IFRS 1 'First-time adoptionof International Financial Reporting Standards' has been applied. An explanationas to how the transition in respect of IFRS has affected the reported financial position, financial performance and cash flow of the group is provided in note 12. This note includes reconciliations of equity and profit or loss for the comparative periods reported under UK GAAP to those reported for those periods under IFRSs. 2 Revenue Revenue derives wholly from the principal activity of the Group which is carriedout in countries adjacent to the Mediterranean. 3 Adjustment to cancellation provision At the end of each accounting period, the company accrues for commissions receivable and payable in respect of sales transactions confirmed by payment of deposits by purchasers. Based on the pattern of cancellations experienced over previous years, a provision is then made against the levels of commissions accrued. The actual cancellation experience in 2007 for sales prior to 31 December 2006 has been significantly greater than that for which provision had been made, due to delays in property construction in Italy. Although these properties have now been re-sold, it is necessary to adjust both commission receivable and commission payable to reflect the cancellations which might otherwise have beenprovided for at 31 December 2006. The group has carried out an extensive review of contractual sales not yet completed. There are current uncertainties in the financial markets which could impact upon the willingness of clients to complete their property purchases and it has therefore not proved possible to assess whether the provision for cancellations included in these interim financial statements will prove either to be sufficient or excessive. 4 Other intangible assets Unaudited Patents £'000 Cost At 1 January 2007 14 At 30 June 2007 14 Amortisation At 1 January 2007 8 At 30 June 2007 8 Net Book Values At 30 June 2007 6 At 31 December 2006 6 5 Property, plant and equipment Unaudited Freehold Investment Office Total land and properties equipment and buildings motor vehicles £'000 £'000 £'000 £'000 Cost or valuation At 1 January 2007 251 218 769 1,238 Additions - 93 60 153 Foreign exchange difference - - (2) (2) At 30 June 2007 251 311 827 1,389 Depreciation At 1 January 2007 27 - 339 366 Charge for year 3 - 58 61 At 30 June 2007 30 - 397 427 Net book value At 30 June 2007 221 311 430 962 At 31 December 2006 224 218 430 872 6 Trade and other receivables Unaudited Unaudited Audited 30 Jun 30 Jun 31 Dec 2007 2006 2006 £'000 £'000 £'000 Trade receivables 461 458 382 Corporation tax receivable 47 - - Other receivables 1,604 1,439 1,831 Prepayments and accrued income 9,579 6,872 10,032 11,691 8,769 12,245 7 Trade and other payables Unaudited Unaudited Audited 30 Jun 30 Jun 31 Dec 2007 2006 2006 £'000 £'000 £'000 Bank overdraft and loan 137 467 248 Other loans - 90 13 Trade payables 1,324 1,381 2,586 Corporation tax payable - 2 - Other taxation and social security 288 253 248 Other payables 1,481 31 85 Accruals and deferred income 4,337 3,217 4,371 Obligations under finance lease 30 8 29 7,597 5,449 7,580 8 Long term borrowings Unaudited Unaudited Audited 30 Jun 30 Jun 31 Dec 2007 2006 2006 £'000 £'000 £'000 Obligations under finance lease 30 9 47 Bank loan 219 293 253 249 302 300 9 Deferred tax Unaudited Unaudited Audited 30 Jun 30 Jun 31 Dec 2007 2006 2006 £'000 £'000 £'000 Deferred tax: At start of period 794 794 794 Acquired with subsidiary undertaking - - (16) Charge/(credit) for period 534 353 757 At end of period 1,328 1,147 1,535 The provision for deferred taxation consists of the tax effects of timingdifferences in respect of income recognition. 10 Share capital Unaudited Unaudited Audited 30 Jun 30 Jun 31 Dec 2007 2006 2006 £'000 £'000 £'000 Authorised Equity shares 100,000,000 Ordinary shares of 10 pence each 10,000 10,000 10,000 Allotted Equity shares 77,979,412 Allotted, called up and fully paid ordinary shares of 10 pence each 7,798 7,063 7,063 During the period, the Company issued 7,350,000 ordinary shares of 10p each at 10p. 11 Earnings per share The earnings per share is based on the profit for the period attributable to theequity holders of the parent of £97,796 and on 71,847,644 ordinary shares of 10pbeing the weighted average number of shares in issue during the period. Thediluted earnings per share is based on 73,407,232 ordinary shares of 10p beingthe weighted average number of shares in issue during the period adjusted forthe outstanding warrants in issue at the period end. 12 Explanation of transition to IFRS The Group has applied IAS34 Interim Financial Reports in preparing thisfinancial information. The Group's transition date is 1 January 2007 and as suchan opening IFRS balance sheet has been prepared at that date. However, 2006comparative information has not been restated under these new accountingstandards as they result in no change to the figures. This information is provided by RNS The company news service from the London Stock Exchange