23 Sep 2015 07:00
Formation Group PLC
("Formation" or the "Company")
Trading update
Since its last Interim Report in May 2015, Formation has continued to perform exceptionally strongly, with record results, in terms of revenues, recorded for the year ending August 2015, and profits for the period well ahead of management expectations.
HIGHLIGHTS:
· Year-end August 2015 anticipated pre-tax profit to exceed £1.75 million;
· Forecast of further significant profitability improvement in the current financial year; and
· £2 million early profit share distribution received on the Norwich House investment
BACKGROUND:
The Company's order book has continued to expand in the second half of the year and currently includes a number of substantial project management contracts. Revenue for the year ended 31 August 2014 was £7.9 million, a figure which, as reported in May, was considerably supassed in the following six months ending 28 February 2015, for which we reported revenue of £10.8 million. The Board is pleased to confirm that Formation has built on this impressive first half performance and is therefore expecting to report record revenues for the twelve months ended 31 August 2015
The development site at 159-161 Iverson Road, London purchased by Formation Homes(London) Limited, a wholly owned subsidiary of the Company, has progressed well and is on target to complete by the end of March 2016. Marketing of this development has commenced with positive early enquiries.
On the 8 July 2015, Formation announced a profit share agreement with Sunbel Development Limited ("Sunbel") in relation to a development property at Norwich House, Streatham High Road, London, entitling Formation to 40% of the net profit arising from the development. A sum of £2 million was distributed to Formation as part of its share of the 40% profit and included in the Company's profit for the financial year to 31 August 2015 , as per the RNS statement dated 28 August 2015.
As a result of these developments, the Board is confident that profits for this financial year, ending 31 August 2016, are likely to be substantially in excess of double the £1.75m anticipated in the financial year ended 31 August 2015. It is also anticipated that this exceptionally strong performance will generate sufficient cash for the Company during the forthcoming year to invest in further projects, some of which are already in the process of being appraised.
FOR FURTHER INFORMATION PLEASE CONTACT:
Formation Group Plc
David Kennedy - Chief Executive Officer 020 7920 7590
Northland Capital Partners Limited - Nominated Adviser
William Vandyk / Gerry Beaney 020 7382 1100
Peterhouse Corporate Finance Limited - Broker
Duncan Vasey / Fungai Ndoro 020 7469 0930