Strip Tinning Regulatory News (STG)

21 Sep 2005 07:00

Solitaire Group PLC21 September 2005 21 September 2005 SOLITAIRE GROUP Plc Solitaire is a leading national provider of property management services INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 "Solitaire invests to sustain strong pipeline of new business" • Turnover - increased by 14.6 per cent to £5.2 million • Profit before tax, amortisation and exceptional costs - up 7.5 per cent to £1.7 million • Earnings per share under FRS 22 - up 3.8 per cent to 16.2p • Interim dividend up 8.3 per cent to 3.9p per share • Organic growth - The number of new developments where the group has contracts to manage, and will receive income in future years, continues to grow apace and the pipeline now represents over £1.3 million per annum of future income George Brutton, Chairman of Solitaire Group Plc, commented: "This half year has provided further exciting opportunities for the group, withthe number of future new business contracts continuing to grow and thecontinuing trend towards the group managing larger residential and mixed usedevelopments". "We anticipate that the rate at which properties are handed over to us formanagement will increase in the second half and this together with the energeticmanagement of our existing portfolio will result in a satisfactory outcome forthe year". For further information: Graham Shapiro, Joint Managing Tel: 020 8364 8497DirectorSolitaire Group PlcTarquin Edwards / Chris Steele 07879 458 364 / 07979 604 687 orBinns & Co PR Tel: 020 7786 9600 Chairman's statement This half year has provided further exciting opportunities for the group, withthe number of future new business contracts continuing to grow and thecontinuing trend towards the group managing larger residential and mixed usedevelopments. At the same time we are actively managing our on-going portfolioand this has led to increased trading profits. This period has also seen uswinning some substantial management contracts from new clients. Moss Kaye Pembertons, which operates in a difficult commercial property market,has experienced a marked temporary slowdown in the fees generated from sales andlettings, which has affected these results. Currently your company has more than 9,000 units in the pipeline which, when allare handed over for management, will add over £1.3 million to annual grossrevenue over the next few years. Expenses have been closely controlled, but wehave been mindful of the need to invest in the business to administer thiscontracted increase in property management. We are also continuing to invest in our regional offices and the ongoing costsincurred are reflected in these results. The Leicester office is just beginningto generate additional income over revenue transferred when it was opened,whilst the Southampton office was only opened at the beginning of 2005 and thebenefit of additional business from new developers in the area will be seen infuture years. Interest costs have risen as we continue to invest in revenuegenerating freehold reversions. We have seen some effect from the subdued nature of the housing market, whereconsumers have shown more caution, which in turn has slowed the speed at whichsome house builders are able to sell properties. This caution has led to a slowdown in a few major developments passing to Solitaire for management, with anensuing temporary effect on revenue. As the housing market stabilises and thenumber of transactions increases, the rate at which developments are handed overto us for management will return to normal. Results Turnover increased by 14.6% to £5,171,000 (2004: £4,511,000).The operating profit for the six months ended 30 June 2005, before writing offexceptional costs, goodwill amortisation and interest, increased by 7.5% to£1,710,000 (2004: £1,590,000). Accordingly, after exceptional costs, interest and goodwill amortisation,pre-tax profits were up by £39,000 or 3.3% to £1,217,000 (2004: £1,178,000) andearnings per share under FRS 22 were up by 3.8% to 16.2p (2004: 15.6p). Adjustedearnings per share, before exceptional costs, goodwill amortisation and afterinterest were 20.4p (2004: 20.3p). The board is recommending the payment of an increased interim dividend of 3.9p(2004: 3.6p) per share, an increase of 8.3% over 2004. The interim dividend willbe paid on 21 November 2005 to shareholders on the register on 30 September2005. Business development Our Leicester office continues to drive some of the new business growth with anumber of new developer clients contributing to current earnings and forwardcontracts for future management. Our Southampton office opened in the early partof this year and we are in the process of transferring further existingmanagement contracts to this office. We look forward to growing our business inthe South and South West of England from this base. People The continuing growth of our core property management business has led to anincrease in staff to support the needs of both residents and our developerclients. We have also secured some additional office space in Barnet in order toaccommodate our anticipated space requirements. In order to deal with the substantial increase in property management over thenext few years and to ensure that we continue to control our costs and improveefficiency, we have recruited Roy Barnett as Chief Operating Officer forSolitaire Property Management Company Ltd, our principal property managementsubsidiary. Roy was previously Chief Information Officer for KensingtonMortgages plc and he will be a strong addition to the group's senior managementteam. Current trading and prospectsLooking forward to the second half of 2005, the fundamentals of the UK housingMarket appear sound. We anticipate that the rate at which properties are handedover to us for management will increase in the second half and this togetherwith the energetic management of our existing portfolio will result in asatisfactory outcome for the year. George Brutton FRICS Chairman21 September 2005 Unaudited consolidated profit and loss account Six Six months months Year to 30 to 30 to 31 June June Dec. 2005 2004 2004 Notes £'000 £'000 £'000 Turnover 5,171 4,511 9,105 Operating expensesExternal fees and commissions 147 123 325Other administration expenses 3,314 2,798 5,680 1,710 1,590 3,100Amortisation of goodwill 208 205 410Exceptional costs - 27 73 Operating profit 1,502 1,358 2,617 Net interest paid (285) (180) (432) Profit on ordinary activities before 1,217 1,178 2,185taxation Taxation on ordinary activities 414 415 784 Profit on ordinary activities after 803 763 1,401taxation Dividends 2 193 177 609 Retained profit for the period 610 586 792 Basic and diluted earnings per share 3 16.2p 15.6p 28.5p Dividend per share 2 3.9p 3.6p 12.3p Earnings per share noteBasic and diluted earnings per share 3 16.2p 15.6p 28.5pAdjustment for amortisation 4.2p 4.2p 8.3pAdjustment for exceptional costs - 0.5p 1.5p Adjusted earnings per share 3 20.4p 20.3p 38.3p Unaudited consolidated balance sheet 30 June 30 June 31 Dec. 2005 2004 2004 £'000 £'000 £'000Fixed assetsIntangible assets 6,941 7,349 7,149Tangible assetsOffice equipment 563 502 485Freehold land and buildings 261 261 261Freehold reversions 17,605 13,581 16,014 18,429 14,344 16,760 25,370 21,693 23,909 Current assetsDebtors 5,142 3,334 4,051Cash and deposits 378 551 391 5,520 3,885 4,442 Creditors: amounts falling duewithin one yearBorrowings 2,557 1,517 2,299Other liabilities 2,663 2,524 2,336 5,220 4,041 4,635Net current (liabilities) / assets 300 (156) (193) Total assets less current 25,670 21,537 23,716liabilities Creditors: amounts falling due aftermore than one yearBorrowings 8,152 5,705 6,460Other liabilities 262 1,550 610 8,414 7,255 7,070Provisions for liabilities andchargesDeferred taxation 20 - 20 Net Assets 17,236 14,282 16,626 Capital and reservesCalled-up share capital 495 491 495Share premium account 3,825 3,691 3,825Revaluation reserve 8,731 6,731 8,731Profit and loss account 4,185 3,369 3,575 Equity shareholders' funds 17,236 14,282 16,626 Unaudited consolidated cash flow statement Six Six months months Year to 30 to 30 to 30 June June Dec. 2005 2004 2004 £'000 £'000 £'000 Cash flow from operating activities 891 1,564 2,033 Returns on investments and servicing offinanceInterest received 12 10 21Interest paid (297) (190) (453) Net cash outflow from returns on (180) (432)investment and servicing of finance (285) UK corporation tax (336) (335) (801) Capital expenditure and financialinvestmentOffice equipment (210) (131) (239)Purchase of freehold reversions (1,592) (838) (1,303)Disposal of freehold reversions - - 32 Net cash outflow from capital expenditure (1,802) (969) (1,510)and financial investment Deferred consideration of acquisition of - - (779)subsidiaryEquity dividends paid (431) (392) (570) Cash outflow before use of liquid (1,963) (312) (2,059)resources and financing Management of liquid resources andfinancingFinancing 1,798 109 1,128 Decrease in cash in the year (165) (203) (931) 2005 2004 2004Reconciliation of net cash flow to £'000 £'000 £'000movement in net debt Decrease in cash in the year (165) (203) (931)Cash inflow from increased debt (1,798) (109) (1,078) Movement in net debt (1,963) (312) (2,009)Non cash deferred taxation provision - (20)Opening net debt (8,388) (6,359) (6,359) Closing net debt (10,351) (6,671) (8,388) SOLITAIRE GROUP Plc Notes 1 Basis of preparation of unaudited interim information The results for the six months ended 30 June 2005 have been reviewed by MacIntyre Hudson and have been prepared on the basis of the accounting policies set out in the consolidated financial statements at 31 December 2004. The comparatives for the year ended 31 December 2004 have been extracted from the audited consolidated financial statements for that period. The audited consolidated financial statements for the year ended 31 December 2004 have been filed with the Registrar of Companies and include an unqualified audit report. The comparatives included in this report do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2 Dividends The board has declared an interim dividend of 3.9p (2004: 3.6p) per ordinary share, payable on 21 November 2005 to shareholders on the register on 30 September 2005. 3 Earnings per share The calculation of earnings per share for the six months ended 30 June 2005 is based upon a profit of £803,000 (2004: £763,000) and the average number of ordinary 10p shares in issue of 4,952,469 (2004: 4,895,666). The group considers that the additional disclosure by way of note of the adjusted earnings per share before the effect of amortisation and exceptional costs more truly reflects its operational performance. 4 Interim report Copies of the interim report for the six months ended 30 June 2005 will be sent to shareholders on 21 October 2005. Further copies will be available from the Company Secretary, Solitaire Group Plc, Lynwood House, 10 Victors Way, Barnet, Hertfordshire, EN5 5TZ and at the group's website, www.solitairegroup.com. This information is provided by RNS The company news service from the London Stock Exchange