Last checked at 26 Nov 2009 07:00
CHAIRMAN'S STATEMENT
On the following pages are the unaudited Accounts for the six months ended 30 September 2009. At this time last year house prices had fallen significantly and since then we have been through turbulent times.
At present house prices have recovered to some extent and now stand at similar levels to this time last year. This recovery has been stimulated by a combination of artificially low interest rates, a reduction in stamp duty and value added tax, quantitative easing and the excess of demand over supply.
Stamp duty and value added tax are due to return to their previous higher levels and quantitative easing may lead to a rise in the rate of inflation which has to be contained by an increase in base rate. Nevertheless we believe it is reasonable to expect the housing market to remain buoyant until the General Election. Thereafter, whatever the complexion of the government then gaining power, it is widely accepted that there will be both cuts in government spending and increases in taxation.
Against this background it is pleasing to report profits for the six months which almost match those for the whole of the previous financial year and with the prospect of further profitable trading during the second six months. Compared with the same period last year revenue is down by 12% but cost of sales is down by over 40% thus giving a rise in gross profit of 25%. Administrative expenses have barely risen and net finance costs are down by 55% thus giving an increase in net profit of 68%.
Long-term borrowings have been reduced by £12 million during the period under review and we continue to place an emphasis on the repayment of debt. We have been able to extend the Group's long-term borrowing facilities of £95 million until 2014 and we aim to be in a strong position when the best purchasing opportunities are identified.
There may be further difficult times ahead but the company is in a strong financial position and getting stronger still. The interim dividend is maintained at 50 pence per share and will be payable on 29 March 2010 to shareholders on the register at 26 February 2010.
GROUP INCOME STATEMENT (UNAUDITED)
| Half year | Half year | Year | |
| ended | ended | ended | |
| 30.09.2009 | 30.09.2008 | 31.03.2009 | |
| £000 | £000 | £000 | |
| Revenue | 25,274 | 28,578 | 53,599 |
| Cost of Sales | (9,382) | (15,910) | (27,657) |
| Gross Profit | 15,892 | 12,668 | 25,942 |
| Administrative expenses | (1,487) | (1,477) | (3,767) |
| Operating profit before changes in | |||
| fair value of investment properties | 14,405 | 11,191 | 22,175 |
| (Decrease) in fair value of investments | - | - | (3,210) |
| Profit from operations | 14,405 | 11,191 | 18,965 |
| Net finance costs | (1,560) | (3,444) | (5,903) |
| Profit before taxation | 12,845 | 7,747 | 13,062 |
| Taxation - current | (3,700) | (2,325) | (4,864) |
| Taxation - deferred | 112 | 79 | 1,191 |
| Taxation | (3,588) | (2,246) | (3,673) |
| Profit attributable to equity shareholders | 9,257 | 5,501 | 9,389 |
| Basic and diluted earnings per share (pence) | 237.4 | 141.1p | 241.0 |
All items within the consolidated income statement relate to continuing operations.
GROUP BALANCE SHEET (UNAUDITED)
| As at | As at | As at | |
| 30.09.2009 | 30.09.2008 | 31.03.2009 | |
| £000 | £000 | £000 | |
| Assets | |||
| Non-current assets | |||
| Property plant and equipment | 2,499 | 2,652 | 2,567 |
| Investment properties | 31,916 | 36,386 | 32,195 |
| 34,415 | 39,038 | 34,762 | |
| Current assets | |||
| Inventories of trading properties | 263,254 | 275,752 | 268,806 |
| Trade and other receivables | 881 | 1,412 | 660 |
| Cash and cash equivalents | 238 | 269 | 840 |
| 264,373 | 277,433 | 270,306 | |
| Total assets | 298,788 | 316,471 | 305,068 |
| Equity and liabilities | |||
| Capital and reserves attributable | |||
| to equity holders of the company | |||
| Share capital | 195 | 195 | 195 |
| Capital redemption reserve | 55 | 55 | 55 |
| Capital reserve | 25 | 25 | 25 |
| Other reserve | 56 | 56 | 56 |
| Cash flow hedge reserve | (3,119) | - | (3,614) |
| Retained earnings | 195,937 | 188,834 | 190,773 |
| 193,149 | 189,165 | 187,490 | |
| Non-current liabilities | |||
| Long-term borrowings | 76,000 | 95,000 | 88,000 |
| Deferred tax | 8,394 | 9,618 | 8,506 |
| 84,394 | 104,618 | 96,506 | |
| Current liabilities | |||
| Bank overdrafts and loans | 13,906 | 19,288 | 13,026 |
| Trade and other payables | 502 | 1,075 | 2,055 |
| Current tax payable | 3,718 | 2,325 | 2,377 |
| Derivative financial instruments | 3,119 | - | 3,614 |
| 21,245 | 22,688 | 21,072 | |
| Total liabilities | 105,639 | 127,306 | 117,578 |
| Total equity and liabilities | 298,788 | 316,471 | 305,068 |
GROUP CASHFLOW STATEMENT (UNAUDITED)
| Half year | Half year | Year | |
| ended | ended | ended | |
| 30.09.2009 | 30.09.2008 | 31.03.2009 | |
| £000 | £000 | £000 | |
| Cash flows from operating activities | |||
| Profit from operations | 14,405 | 11,191 | 18,965 |
| Adjustment for: | |||
| Depreciation | 76 | 100 | 192 |
| Loss on disposal of property, plant and equipment | - | 2 | 145 |
| Decrease in fair value of investment properties | - | - | 3,210 |
| Cash flow from operations before movement | |||
| in working capital | 14,481 | 11,293 | 22,512 |
| Decrease/(Increase) in inventories | 5,552 | (4,391) | 2,555 |
| (Increase)/Decrease in receivables | (221) | (294) | 459 |
| (Decrease) in payables | (1,556) | (2,005) | (1,053) |
| Cash generated from operations | 18,256 | 4,603 | 24,473 |
| Interest paid | (1,564) | (3,446) | (5,906) |
| Income taxes paid | (2,356) | (3,985) | (6,443) |
| Net cash inflow/(outflow) from operating activities | 14,336 | (2,828) | 12,124 |
| Investing activities | |||
| Interest received | - | 2 | 3 |
| Proceeds from disposal of investment properties | 650 | - | 1,005 |
| Proceeds from disposal of property, plant and equipment | - | 15 | 15 |
| Purchase of property, plant and equipment | (7) | (48) | (58) |
| Capital expenditure on investment properties | (371) | (183) | (350) |
| Net cash inflow/(outflow) from investing activities | 272 | (214) | 615 |
| Cash flows from financing activities | |||
| Increase in borrowings | - | 390 | - |
| Repayment of borrowings | (12,700) | - | (9,110) |
| Equity dividend paid | (4,093) | (4,093) | (6,042) |
| Net cash (outflow) from financing activities | (16,793) | (3,703) | (15,152) |
| Net (decrease) in cash and cash equivalents | (2,185) | (6,745) | (2,413) |
| Opening cash and cash equivalents | (11,211) | (8,798) | (8,798) |
| Closing cash and cash equivalents | (13,396) | (15,543) | (11,211) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Half year | Half year | Year | |
| ended | ended | ended | |
| 30.09.2009 | 30.09.2008 | 31.03.2009 | |
| £000 | £000 | £000 | |
| Shareholders' funds as at 1 April | 187,490 | 187,757 | 187,757 |
| Profit for the period | 9,257 | 5,501 | 9,389 |
| Change in fair value of cash flow hedge | 495 | - | (3,614) |
| Dividends | (4,093) | (4,093) | (6,042) |
| Shareholders' funds at the end of the period | 193,149 | 189,165 | 187,490 |
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
| Half year | Half year | Year | |
| ended | ended | ended | |
| 30.09.2009 | 30.09.2008 | 31.03.2009 | |
| £000 | £000 | £000 | |
| Profit for the year | 9,257 | 5,501 | 9,389 |
| Change in fair value of cash flow hedge | 495 | - | (3,614) |
| Total recognised income | 9,752 | 5,501 | 5,775 |
| The total recognised income in the year is attributable to: Equity shareholders of the parent | 9,752 | 5,501 | 5,775 |