16 Jun 2008 07:00
SAFELAND PLC
16 June 2008
HIGHLIGHTS
Safeland Plc, the property fund management and property trading group announces its unaudited results for the year ended 31 March 2008.
Financial Highlights:
Revenue of £23.567m (2007: £21.472m);
Loss before tax £0.977m after property write down of £1.463m;
EPS loss of 3.92p (2007: earnings 12.68p);
NAV per share maintained at 114p;
Gearing now stands at 110%;
Operational Highlights:
£61m of assets under management in managed workspace fund;
Average lot size £0.756m (2007: £0.358m);
1,649,350 shares bought by the Company for cancellation at 70p each
Raymond Lipman, Chairman of Safeland Plc, said:
"Conditions continue to be difficult. However, we have the support of our bankers and our professionals and I therefore look to the future with confidence."
SAFELAND PLC
16 June 2008
Chairman's Statement
For the year ended 31 March 2008 the group has made a loss before tax from continuing operations of £977,000 compared to a profit for the previous year of £3,228,000 (restated to exclude discontinued operations). The resultant loss per share from continuing operations is 3.92p (2007 earnings per share: restated 12.68p).
As a result of current market conditions the board together with assistance from an external valuer examined its property portfolio as at the year end and took the decision to make write downs amounting to £1,463,000 which are included in the loss referred to above.
On a comparable property trading basis, ignoring the write downs and the profits in 2007 that emanated from share disposals, Safeland made a profit in the year under review of £486,000 compared to a £344,000 loss in the previous year.
During the year to 31 March 2008 the group undertook 29 transactions compared to 51 in the previous year with an average lot size of £756,000 (2007: £358,000). Revenue for the year was £23,567,000 compared to £21,472,000 in the prior year. Gearing at the year end was 110% (2007: 117%). Net assets per share were maintained at 114p due to the purchase of 1,649,350 shares by the Company for cancellation at 70p each during the year.
As I mentioned in my statement in the interim results, it was decided to cease involvement in Espazio, the Italian self storage company, which accordingly was placed into voluntary liquidation on 1 October 2007. I can advise shareholders that the freehold property in Rome was sold in April 2008 and Espazio also ceased trading from the property in Milan. It is expected that all outstanding matters will be finalised during the first half of the current financial year.
Shareholders will be aware that we have been involved in a managed workspace fund for the last 18 months. A conscious decision was taken to refrain from its expansion until the property market settles down and, accordingly its assets under management have only grown to £61m compared to £50m in the previous year.
Shareholders may be aware from a recent announcement that our two long standing non-executive directors Leonard Green and Richard Pryce are retiring from the board as of 30 June 2008. I would like to take this opportunity of thanking them for their sterling efforts over many years and wish them well for the future.
At the same time I am delighted that Edward Young will be joining the board as of that date as a non-executive director. I am looking forward to his contribution bearing in mind his experience both as a lawyer and as a non-executive director on the boards of other companies.
Conditions continue to be difficult. However, we have the support of our bankers and our professionals and I therefore look to the future with confidence.
Raymond Lipman
Chairman
13 June 2008
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2008
|
| Note | 2008 £'000 | 2007 Restated £'000 |
|
|
| Unaudited | Audited |
| Revenue | 2 | 23,567 | 21,472 |
| Cost of sales |
| (19,339) | (17,727) |
| Gross profit |
| 4,228 | 3,745 |
|
|
| ||
| Sales and distribution costs |
| (573) | (370) |
| Administrative expenses |
| (4,022) | (3,944) |
| Other operating income |
| 855 | 326 |
| (Loss) / profit on disposal of property, plant and equipment | (4) | 29 | |
| Gains on revaluation of investment properties |
| 287 | - |
| Profit on disposal of investment properties |
| 105 | 156 |
| Operating profit / (loss) |
| 876 | (58) |
|
|
| ||
| Share of results of associates - post tax |
| - | (4) |
| Impairment of interests in associates | (10) | - | |
| Profit on disposal of available-for-sale investments | - | 3,572 | |
| Profit before interest |
| 866 | 3,510 |
|
|
| ||
| Finance income |
| 81 | 139 |
| Finance costs |
| (1,924) | (421) |
| (Loss) / profit before tax | 2 | (977) | 3,228 |
| Tax |
| 267 | (882) |
| (Loss) / profit for the financial year from continuing operations |
| (710) | 2,346 |
| (Loss) / profit for the period from discontinued operations | 3 | (83) | 463 |
| (Loss) / profit for the financial year | (793) | 2,809 |
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2008
| 2008 | 2007 Restated | ||
| Unaudited | Audited | ||
| (Loss) / earnings per share | |||
| Continuing operations | |||
| Basic (loss) / earnings per share | 4 | (3.92)p | 12.68p |
| Diluted (loss) / earnings per share | (3.92)p | 12.67p | |
| Continuing and discontinued operations | |||
| Basic (loss) / earnings per share | (4.38)p | 15.18p | |
| Diluted (loss) / earnings per share | (4.38)p | 15.17p |
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 March 2008
|
| Note | 2008 £'000 | 2007 £'000 | |
|
|
|
| Unaudited | Audited |
|
|
|
|
|
|
| Fair value (losses) / gains on available-for-sale investments |
|
| (102) | 18 |
|
|
|
| ||
| Exchange differences on translation of foreign operations |
|
| (38) | 43 |
|
|
|
| ||
| Tax on items taken directly to equity |
|
| 30 | (5) |
|
|
|
| ||
| Transfer to profit on sale of available-for-sale investments |
|
| - | (3,053) |
| Transfer foreign currency translation reserve to income statement | 45 | - | ||
| Tax on items transferred from equity |
|
| - | 751 |
| Net (loss) recognised directly in equity | (65) | (2,246) | ||
| (Loss) / profit for the year |
| (793) | 2,809 | |
| Total recognised income and expense for the year attributable to equity shareholders |
| 7 | (858) | 563 |
CONSOLIDATED BALANCE SHEET
31 March 2008
|
| Note | 2008 £'000 | 2007 £'000 |
|
|
| Unaudited | Audited |
| Non-current assets |
|
|
|
| Property, plant and equipment |
| 2,177 | 4,263 |
| Investment properties |
| 2,054 | 1,868 |
| Interests in associates |
| - | 10 |
| Available-for-sale investments |
| 1,089 | 1,191 |
| Deferred tax assets |
| 104 | 46 |
| Total non-current assets |
| 5,424 | 7,378 |
| Current assets |
| ||
| Trading properties |
| 33,390 | 38,753 |
| Trade and other receivables |
| 2,657 | 2,363 |
| Current tax receivable | 283 | - | |
| Cash and cash equivalents | 6 | 813 | 1,448 |
| Total current assets |
| 37,143 | 42,564 |
| Total assets |
| 42,567 | 49,942 |
| Current liabilities |
| ||
| Bank loans and overdrafts |
| 19,679 | 8,089 |
| Trade and other payables |
| 1,255 | 2,051 |
| Current tax liabilities |
| - | 541 |
| Total current liabilities |
| 20,934 | 10,681 |
| Non-current liabilities |
|
| |
| Bank loans |
| 2,301 | 18,040 |
| Deferred tax liabilities |
| 146 | 103 |
| Total non-current liabilities |
| 2,447 | 18,143 |
| Total liabilities |
| 23,381 | 28,824 |
| Net assets |
| 19,186 | 21,118 |
| Equity |
| ||
| Share capital |
| 843 | 925 |
| Share premium account |
| 5,351 | 5,351 |
| Capital redemption reserve |
| 847 | 765 |
| Share based payment reserve | 86 | - | |
| Translation reserve |
| - | (7) |
| Investment revaluation reserve | 13 | 85 | |
| Retained earnings |
| 12,046 | 13,999 |
| Total equity | 7 | 19,186 | 21,118 |
|
|
|
|
|
CONSOLIDATED CASH FLOW STATEMENT
Year Ended 31 March 2008
|
|
| Note | 2008 £'000 | 2007 Restated £'000 | |
|
|
|
| Unaudited | Audited | |
|
|
| ||||
| Operating activities | |||||
| Net cash inflow / (outflow) from operations |
| 5 | 6,724 | (22,575) | |
| Interest paid |
| (1,924) | (481) | ||
| Tax paid | (542) | (728) | |||
| Net cash inflow / (outflow) from operating activities | 4,258 | (23,784) | |||
| Investing activities |
|
| |||
| Interest received |
|
| 81 | 140 | |
| Purchase of investment properties |
|
| (761) | (776) | |
| Purchase of property, plant and equipment |
|
| (482) | (518) | |
| Purchase of available-for-sale investments |
|
| - | (1,000) | |
| Proceeds from sale of property, plant and equipment |
|
| 278 | 2,947 | |
| Proceeds from sale of investment properties |
|
| 967 | 3,696 | |
| Proceeds from sale of available for sale investments |
|
| - | 6,890 | |
| Cash outflows in respect of subsidiary in voluntary liquidation | (358) | - | |||
| Net cash (outflow) / inflow from investing activities |
|
| (275) | 11,379 | |
| Financing activities |
|
| |||
| New loans |
|
| 19,140 | 21,513 | |
| Loan repayments |
|
| (23,330) | (9,306) | |
| Purchase of own shares | (1,160) | - | |||
| Net cash (outflow) / inflow from financing activities |
|
| (5,350) | 12,207 | |
| Net decrease in cash and cash equivalents in the year |
|
| (1,367) | (198) | |
| Cash and cash equivalents at beginning of year |
|
| 1,349 | 1,547 | |
| Cash and cash equivalents at end of year |
| 6 | (18) | 1,349 | |
NOTES TO THE PRELIMINARY ANNOUNCEMENT
Year ended 31 March 2008
1. BASIS OF PREPARATION
The financial information set out in the announcement does not constitute the group's statutory financial statements within the meaning of section 240 of the Companies Act 1985, for the years ended 31 March 2008 or 2007. The statutory financial statements for the year ended 31 March 2008 will be finalised and signed on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's Annual General Meeting.
The financial information for the year ended 31 March 2007 is derived from the statutory accounts for that year. The auditor reported on those statutory accounts which have been delivered to the Registrar of Companies. The audit report was unqualified and did not contain a statement under s237(2) or (3) of the Companies Act 1985.
This announcement is prepared applying International Financial Reporting Standards as adopted by the European Union and using accounting policies that are consistent with those as stated in the previous year's financial statements.
This preliminary announcement was approved by the Board of directors on 13 June 2008.
Copies of this announcement are available from the company's registered office at 94-96 Great North Road, London, N2 0NL and on its website, www.safeland.co.uk. The Annual Report and Accounts will be sent to shareholders shortly.
2. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the group was organised into three operating divisions as detailed below:
property trading, property refurbishment and property investment
property fund management; and
self storage
These divisions are the basis on which the group reports its primary segmental information.
The group's self storage subsidiary was placed into voluntary liquidation on 1 October 2007 and this segment has been disclosed as a discontinued operation.
Geographical segments
The group's operations are wholly based in the United Kingdom except the self-storage operation which operated in Italy and was placed into voluntary liquidation on 1 October 2007.
No additional segmental disclosure is provided in respect of geographical segments as they are identical to the business segments detailed above.
| Year ended 31 March 2008 | Property trading, refurbishment and investment | Self storage | Fund management | Discontinued operations | Total | |||||
| £'000 | £'000 | £'000 | £'000 | £'000 | ||||||
| Revenue | 23,136 | 225 | 431 | (225) | 23,567 | |||||
| Segment result | 1,353 | (52) | (477) | 52 | 876 | |||||
| Impairment of interests in associates | (10) | |||||||||
| Finance income | 81 | |||||||||
| Finance costs | (1,924) | |||||||||
| Loss before tax | (977) | |||||||||
| Tax | 267 | |||||||||
| Loss for the year from discontinued operations | (83) | |||||||||
| Loss for the financial year | (793) | |||||||||
| Other information | ||||||||||
| Capital expenditure | 1,208 | 12 | 23 | 1,243 | ||||||
| Depreciation | 164 | - | 28 | 192 | ||||||
| Share based payment | - | - | 86 | 86 | ||||||
| Balance sheet | ||||||||||
| Segment assets | 38,044 | 1,593 | 1,454 | 41,091 | ||||||
| Available-for-sale investments | 1,089 | |||||||||
| Deferred tax asset | 104 | |||||||||
| Current tax receivable | 283 | |||||||||
| Total assets | 42,567 | |||||||||
| Segment liabilities | 1,095 | - | 160 | 1,255 | ||||||
| Borrowings | 21,980 | |||||||||
| Deferred tax liabilities | 146 | |||||||||
| Total liabilities | 23,381 | |||||||||
| Year ended 31 March 2007 restated | Property trading, refurbishment and investment | Self storage | Fund management | Discontinued operations | Total | |||||
| £'000 | £'000 | £'000 | £'000 | £'000 | ||||||
| Revenue | 21,353 | 438 | 119 | (438) | 21,472 | |||||
| Segment result | 7 | 506 | (65) | (506) | (58) | |||||
| Share of result of associates - post tax | (4) | |||||||||
| Profit on disposal of available-for-sale investments | 3,572 | |||||||||
| Finance income | 139 | |||||||||
| Finance costs | (421) | |||||||||
| Profit before tax | 3,228 | |||||||||
| Tax | (882) | |||||||||
| Profit for the year from discontinued operations | 463 | |||||||||
| Profit for the financial year | 2,809 | |||||||||
| Other information | ||||||||||
| Capital expenditure | 1,162 | 22 | 110 | 1,294 | ||||||
| Depreciation | 163 | 172 | 7 | 342 | ||||||
| Balance sheet | ||||||||||
| Segment assets | 45,004 | 2,361 | 1,330 | 48,695 | ||||||
| Interests in associates | 10 | |||||||||
| Available-for-sale investments | 1,191 | |||||||||
| Deferred tax asset | 46 | |||||||||
| Total assets | 49,942 | |||||||||
| Segment liabilities | 1,615 | 355 | 81 | 2,051 | ||||||
| Borrowings | 26,129 | |||||||||
| Current tax liabilities | 541 | |||||||||
| Deferred tax liabilities | 103 | |||||||||
| Total liabilities | 28,824 | |||||||||
3. DISCONTINUED OPERATIONS
On 1 October 2007, the Group's subsidiary, Espazio SRL was placed into voluntary liquidation and hence all assets and liabilities were deemed to be disposed of on this date. This subsidiary carried out the Group's self storage business. The results of the discontinued operations which have been included within the consolidated income statement, were as follows:
| 2008 £'000 | 2007 £'000 | |
| Revenue | 225 | 438 |
| Expenses | (277) | (842) |
| Profit on disposal of property, plant and equipment | - | 910 |
| Finance costs (net) | (28) | (43) |
| (Loss) / profit before tax | (80) | 463 |
| Foreign currency translation reserve | (45) | - |
| Profit on disposal of discontinued operations | 42 | - |
| (Loss) / profit attributable to discontinued operations | (83) | 463 |
| Basic (loss) / earnings per share | (0.46)p | 2.50p |
| Diluted (loss) / earnings per share | (0.46)p | 2.50p |
The net assets of Espazio SRL at the date of disposal and at the end of the comparative year were as follows:
| 1 October 2007 £'000 | 31 March 2007 £'000 | |
| Property, plant and equipment | 2,094 | 2,082 |
| Trade and other receivables | 163 | 162 |
| Cash and cash equivalents | 30 | 117 |
| Bank loan | (691) | (741) |
| Trade and other payables | (373) | (355) |
| Loan from Safeland plc to Espazio SRL | (2,718) | (2,646) |
| (1,495) | (1,381) | |
| Add: loan from Safeland plc to Espazio SRL | 2,718 | 2,646 |
| Net assets (excluding loan from Safeland plc to Espazio SRL) | 1,223 | 1,265 |
| Profit arising on voluntary liquidation of subsidiary | 42 | |
| Total estimated cash consideration | 1,265 |
The total estimated cash consideration comprises the directors' estimate of balance of the loan from Safeland plc to Espazio SRL of £2,718,000 that will be recoverable from the liquidator. During the period from 1 October 2007 to 31 March 2008 there was a net advance from the company of £328,000 and subsequent to the year end there has been cash inflows totalling £1,278,000. The directors estimate the balance of the estimated cash consideration of £315,000 will be received during the year ending 31 March 2009.
4. (LOSS) / EARNINGS PER SHARE
The calculation of the basic and diluted (loss) / earnings per share is based on the following data:
| 2008 £'000 | 2007 £'000 | |
| Unaudited | Audited | |
| (Loss) / profit for the year from continuing operations | (710) | 2,346 |
| (Loss) / profit for the year from discontinued operations | (83) | 463 |
| (Loss) / profit for the year attributable to equity holders of the company | (793) | 2,809 |
| 2008 '000 | 2007 '000 | |
| Unaudited | Audited | |
| Weighted average number of ordinary shares for the purposes of basic (loss) / earnings per share | 18,122 | 18,501 |
| Effect of dilutive potential ordinary shares | - | 14 |
| Weighted average number of ordinary shares for the purposes of diluted (loss) / earnings per share | 18,122 | 18,515 |
There is no dilutive effect of potential ordinary shares in 2008 as there is a loss for the year. The dilution in 2007 arises from the effect of share options.
5. NOTES TO THE CASH FLOW STATEMENT
| 2008 £'000 | 2007 restated £'000 | |
| Unaudited | Audited | |
| (Loss) / profit before tax from continuing operations | (977) | 3,228 |
| (Loss) / profit before tax from discontinued operations | (83) | 463 |
| Adjustments for: | ||
| Depreciation of property, plant and equipment | 192 | 342 |
| Loss / (profit) on sale of property, plant and equipment | 4 | (939) |
| Profit on sale of investment properties | (105) | (156) |
| Gains on revaluation of investment properties | (287) | - |
| Profit on sale of available-for-sale investments | - | (3,572) |
| Share of results of associates | - | 4 |
| Impairment of interests in associates | 10 | - |
| Share based payment charge | 86 | - |
| Finance costs (net) | 1,871 | 325 |
| Changes in working capital: | ||
| Decrease / (increase) in trading properties | 5,363 | (22,366) |
| Decrease / (increase) in trade and other receivables | 1,136 | (955) |
| (Decrease) / increase in trade and other payables | (486) | 1,051 |
| Net cash inflow / (outflow) from operations | 6,724 | (22,575) |
6. CASH AND CASH EQUIVALENTS
|
| 2008 £'000 | 2007 £'000 |
|
| Unaudited | Audited |
| Cash and cash equivalents per balance sheet | 813 | 1,448 |
| Bank overdrafts | (831) | (99) |
| Cash and cash equivalents per cash flow statement | (18) | 1,349 |
All of the group's cash and cash equivalents at 31 March 2008 are at floating interest rates except for cash held in non-interest bearing accounts of £4,000 (2007: £7,000).
All of the group's cash and cash equivalents at 31 March 2008 are in sterling except for £Nil (2007: £117,000) held in Euros.
The directors consider that the carrying amount of cash and cash equivalents approximates their fair value.
7. STATEMENT OF CHANGES IN EQUITY
| 2008 £'000 | 2007 £'000 | |
| Unaudited | Audited | |
| 1 April 2007 | 21,118 | 20,555 |
| Total recognised income and expense for the year | (858) | 563 |
| Purchase of own shares | (1,160) | - |
| Share based payment charge | 86 | - |
| 31 March 2008 | 19,186 | 21,118 |