10 Dec 2013 07:00
SAFELAND PLC
(the "Company" or "Group")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013
Chairman's statement
The six months to 30 September 2013 has seen Safeland plc make steady progress across all activities of the Group, in line with the Board's expectations. The Group has reported a profit for the period of £215,000 (2012: £104,000).
The Group has completed the development work on three projects since 31 March 2013. These properties are currently being marketed and we have good interest from potential buyers.
Our joint venture Safestay continues to gain momentum. In the six months to 30 September 2013, the hostel achieved average occupancy of beds available of 79.2% (2012: 50.2%) and has a good level of reservations for 2014. The hostel is now making an operating profit in addition to revaluation gains on the underlying assets.
In the period, the Group invested £5.9m in the acquisition of three properties each with planning potential to generate positive returns on our investment. Planning applications are being compiled for submission to the local authority to exploit the significant uplift in value from a change in the current consent.
The unaudited net asset value per share rose 2p to 59p (31 March 2013: 57p), an increase of 3.5%.
The outlook remains cautiously optimistic with a number of positive signals of the continuing recovery in the London property market. The Land Registry has reported that in the year to 31 October 2013 the average property value in London has increased by 8.7% along with property sale volumes being up year on year. With Safeland plc well placed to take advantage of this growth, the Board is confident of the growth in value of its property portfolio and future operating profits of the Group.
Raymond Lipman Chairman
Contacts:
Raymond Lipman
Chairman, Safeland Plc T: 020 8815 1600
Tom Griffiths
Westhouse Securities Limited T: 020 7601 6100
Independent review report to Safeland PLC
Introduction
We have been engaged by the Company to review the financial information in the half-yearly financial report for the six months ended 30 September 2013 which comprises of the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement of cash flows, condensed consolidated statement of changes in equity and related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors of the Company. The AIM Rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2013 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.
GRANT THORNTON UK LLPAUDITOR
London9 December 2013
Safeland Plc Condensed consolidated income statement | Unaudited Six months | Unaudited Six months | Audited Year |
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| ended | ended | ended |
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| 30 September | 30 September | 31 March |
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2013 | 2012 | 2013 |
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| £000 | £000 | £000 |
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Revenue | 5,029 | 5,742 | 8,587 |
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Cost of sales | (4,003) | (4,583) | (7,106) |
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Gross profit | 1,026 | 1,159 | 1,481 |
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Administrative expenses | (711) | (763) | (1,677) |
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Gain on revaluation of investment properties | - | - | 225 |
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Share of results of jointly controlled entity | 58 | - | 446 |
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Share of results of associate | 22 | 19 | 20 |
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Operating profit | 395 | 415 | 495 |
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Exceptional (loss)/profit arising from misappropriation of funds | - | (306) | 809 |
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Finance income | - | 1 | 2 |
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Finance costs | (180) | (74) | (278) |
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Profit before tax | 215 | 36 | 1,028 |
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Tax | - | 68 | 132 |
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Profit for the financial period attributable to owners of the parent company | 215 | 104 | 1,160 |
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Basic earnings per share (note 2) | 1.28p | 0.62p | 6.88p | |||
Diluted earnings per share (note 2) | 0.58p | 0.58p | 6.79p | |||
Safeland plc Condensed consolidated statement of comprehensive income | Unaudited Six months | Unaudited Six months | Audited Year |
| ended | ended | ended |
| 30 September | 30 September | 31 March |
| 2013 | 2012 | 2013 |
| £000 | £000 | £000 |
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Profit for the period | 215 | 104 | 1,160 |
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Other comprehensive income |
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Fair value losses | - | - | (2) |
Other comprehensive losses in the period | - | - | (2) |
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Total comprehensive income for the period attributable to owners of the parent company | 215 | 104 | 1,158 |
Condensed consolidated statement of financial position | Unaudited 30 September | Unaudited 30 September | Audited 31 March |
| 2013 | 2012 | 2013 |
| £000 | £000 | £000 |
Non-current assets |
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Property plant and equipment | 149 | 181 | 133 |
Investment properties (note 5) | 5,018 | 4,793 | 5,018 |
Investment in jointly controlled entity | 504 | - | 446 |
Investments in associate | 126 | 171 | 103 |
Available-for-sale investments | 50 | 45 | 50 |
| 5,847 | 5,190 | 5,750 |
Current assets |
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Trading properties (note 6) | 13,239 | 8,995 | 9,864 |
Trade and other receivables | 1,308 | 1,117 | 1,731 |
Cash and cash equivalents | 499 | 653 | 712 |
| 15,046 | 10,765 | 12,307 |
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Total assets | 20,893 | 15,955 | 18,057 |
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Current liabilities |
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Bank loans and overdrafts (note 7) | - | 6,171 | - |
Trade and other payables | 488 | 456 | 750 |
Derivative financial instruments | 2 | - | 10 |
| 490 | 6,627 | 760 |
Non-current liabilities |
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Bank loans (note 7) | 9,700 | - | 6,878 |
Deferred income tax liabilities | 756 | 820 | 756 |
| 10,456 | 820 | 7,634 |
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Total liabilities | 10,946 | 7,447 | 8,394 |
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Net assets | 9,947 | 8,508 | 9,663 |
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Equity |
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Share capital | 843 | 843 | 843 |
Share premium account | 5,351 | 5,351 | 5,351 |
Capital redemption reserve | 847 | 847 | 847 |
Share-based payment reserve | 280 | 110 | 211 |
Investment revaluation reserve | 5 | 7 | 5 |
Retained earnings | 2,621 | 1,350 | 2,406 |
Total equity attributable to owners of the parent company | 9,947 | 8,508 | 9,663 |
Safeland plc Condensed consolidated statement of cash flows | Unaudited Six months | Unaudited Six months | Audited Year |
| ended | ended | ended |
| 30 September | 30 September | 31 March |
| 2013 | 2012 | 2013 |
| £000 | £000 | £000 |
Cash flows from operating activities |
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|
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Cash (utilised)/generated from operations (note 4) | (2,819) | 1,269 | 648 |
Interest paid | (189) | (99) | (227) |
Net cash (utilised)/ generated from operating activities | (3,008) | 1,170 | 421 |
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Cash flows from investing activities |
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Cash flows from investing activities | - | 1 | 2 |
Distributions from associate | - | - | 70 |
Purchase of property, plant and equipment | (41) | (40) | (105) |
Proceeds from sale of property, plant and equipment | 14 | 84 | 179 |
Net cash (outflow)/inflow from investing activities | (27) | 45 | 146 |
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Cash flows from financing activities |
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New loans | 2,822 | 135 | 6,878 |
Loan repayments | - | (1,154) | (7,190) |
Net cash inflow/(outflow) from financing activities | 2,822 | (1,019) | (312) |
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Net (decrease)/ increase in cash and cash equivalents | (213) | 196 | 255 |
Cash and cash equivalents at beginning of period | 712 | 457 | 457 |
Cash and cash equivalents at end of period | 499 | 653 | 712 |
Safeland plc | Share | Share | Capital | Share-based | Investment | Retained | Total |
Condensed consolidated statement of changes in | capital | premium | redemption | payment | revaluation | earnings | equity |
equity |
| account | reserve | reserve | reserve |
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| £000 | £000 | £000 | £000 | £000 | £000 | £000 |
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At 1 April 2013 | 843 | 5,351 | 847 | 211 | 5 | 2,406 | 9,663 |
Comprehensive income |
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Profit for the six months period to 30 September 2013 | - | - | - | - | - | 215 | 215 |
| - | - | - | - | - | 215 | 215 |
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Transactions with owners |
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Share-based payment charge for the period | - | - | - | 69 | - | - | 69 |
Balance at 30 September 2013 | 843 | 5,351 | 847 | 280 | 5 | 2,621 | 9,947 |
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1. Basis of preparation and accounting policies
The condensed interim consolidated financial statements of the Company and its subsidiaries ("the Group") for the six months ended 30 September 2013 ("the period") have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 31 March 2013. This half year statement does not constitute full accounts as defined by Section 434 of the Companies Act 2006
These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements, and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 March 2013. The auditors' opinion on these Statutory Accounts was not qualified and contained no emphasis of matter. While the financial figures included within this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this report does not contain sufficient information to constitute an interim financial report as set out in International Accounting Standard 34 Interim Financial Reporting.
2. Earnings per share
| Unaudited Six months | Unaudited Six months | Audited Year |
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| ended | ended | ended |
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| 30 September | 30 September | 31 March |
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2013 | 2012 | 2013 |
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| £000 | £000 | £000 | ||||
Profit for the financial period attributable to owners of the parent company | 215 | 104 | 1,160 |
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| No | No | No |
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| 000 | 000 | 000 |
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Weighted average number of ordinary shares for |
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the purposes of basic earnings per share | 16,851 | 16,851 | 16,851 |
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Effect of potential dilutive ordinary shares:
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share options | 19,865 | 938 | 214 |
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Weighted average number of ordinary shares for the purposes of diluted earnings per share | 36,716 | 17,789 | 17,065 |
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Basic earnings per share Diluted earnings per share | 1.28p 0.58p | 0.62p 0.58p | 6.88p 6.79p |
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Diluted Earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. The significant increase in the number of potential dilutive ordinary shares options in the six months to September 2013 is as a result of the market price of those shares during the period under review being higher than the option price for the entire period.
3. Dividends
No interim dividend has been declared.
4. Cash flows from operating activities
| Unaudited Six months | Unaudited Six months | Audited Year |
| ended | ended | ended |
| 30 September | 30 September | 31 March |
| 2013 | 2012 | 2013 |
| £000 | £000 | £000 |
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Profit before tax | 215 | 36 | 1,028 |
Depreciation | 18 | 26 | 57 |
Loss on sale of property, plant and equipment | (7) | - | (10) |
Gain on revaluation of investment properties | - | - | (225) |
Impairment of available-for-sale investments | - | 6 | - |
Finance costs | 180 | 74 | 278 |
Share of results of associate | (22) | (19) | (446) |
Share of results of jointly controlled entity | (58) | - | (20) |
Finance income | - | (1) | (2) |
Share-based payments charge | 69 | 37 | 138 |
| 395 | 159 | 798 |
Changes in working capital |
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(Increase)/decrease in trading properties | (3,375) | 1,232 | 363 |
Decrease/(increase) decrease in trade and other receivables | 423 | (29) | (584) |
Decrease/(increase)in trade and other payables | (262) | (93) | 71 |
| (2,819) | 1,269 | 648 |
5. Investment properties | ||||||||
Unaudited Six months | Unaudited Six months | Audited Year |
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ended | ended | ended |
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30 September | 30 September | 31 March |
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2013 | 2012 | 2013 |
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£000 | £000 | £000 |
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Fair value |
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Start of the period | 5,018 | 4,793 | 4,793 |
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Increase in fair value during the period | - | - | 225 |
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End of period | 5,018 | 4,793 | 5,018 |
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The fair value of the investment properties at 31 March 2013 and 30 September 2013 comprises freehold properties of £4,440,000 and long leasehold properties of £578,000
The directors do not consider the fair value of the Group's lease obligations associated with its long leasehold investment properties to be material to the financial statements. As a result, no finance lease obligations are included in the statement of financial position at 30 September 2013, 30 September 2012 or 31 March 2013.
6. Trading properties
Unaudited Six months | Unaudited Six months | Audited Year | |||
ended | ended | ended | |||
30 September | 30 September | 31 March | |||
2013 | 2012 | 2013 | |||
£000 | £000 | £000 | |||
Properties for resale
| 13,239 | 8,995 | 9,864 | ||
The Group has pledged properties for resale with carrying value of £13,239,000 (30 September 2012: £8,995,000 and 31 March 2013: £9,864,000).
7. Bank loans and overdrafts | ||||||||
Unaudited Six months | Unaudited Six months | Audited Year |
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ended | ended | ended |
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30 September | 30 September | 31 March |
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2013 | 2012 | 2013 |
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£000 | £000 | £000 |
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Bank loans and overdraft | 9,700 | 6,171 | 6,878 |
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There were no breaches in bank loan covenants as at 30 September 2013, 30 September 2012 or 31 March 2013. All of the Group's bank loans and overdrafts disclosed above comprise borrowings in sterling. The bank loans are secured on properties owned by the Group.
8. Copies of this announcement are available on the Company's website www.safeland.co.uk.