Sutton Harbour Holdings Regulatory News (SUH)

24 May 2007 07:01

Sutton Harbour Holdings PLC24 May 2007 SUTTON HARBOUR HOLDINGS PLC Preliminary Results for the year ended 31 March 2007 Chairman's Statement Year ended 31 March 2007 I am pleased to report that your Company has consolidated the significantadvances made last year and has achieved another year of profit growth. Ourregeneration sector, with its increasing portfolio of projects, made the largestcontribution to profits in the year. Our transport activities achieved only amodest profit having encountered various trading difficulties. In many ways thishas been a challenging year and I would like to congratulate and thank theexecutive directors and all the staff for their hard work and dedication. Profit before taxation is up 23% on last year to £4.212m (2006: £3.420m) andearnings per share have also advanced 23% to 12.09p (2006: 9.81p). Totaloperating profit of £3.226m (2006: £3.596m) excludes the profit of £2.1m on thesale of fixed assets which includes the sale of the building occupied by theDepartment for Works and Pensions (DWP). Your Company's strategy to develop abalanced business portfolio remains justifiable in achieving sustainable profitgrowth and we can expect contributions from our different business sectors tovary from year to year. Gearing has reduced to 23.1% at the year end (2006:44.5%). Your Board proposes a final dividend of 2.55p, which added to the interimdividend of 1.5p paid in January 2007, gives a total dividend for the year of4.05p per share. This represents an increase of 6.6% when compared with lastyear's total dividend of 3.8p per share. The final dividend will be payable on24 August 2007 to shareholders on the register on 10 August 2007. The shares areexpected to go ex-dividend on 8 August 2007. The Board is also proposing a onefor one share capitalisation issue but before this can occur our authorisedcapital will have to be increased. An appropriate resolution will be put toshareholders at the Annual General Meeting. Results from our regeneration sector (excluding the profit on sale of the DWPbuilding) have almost doubled from last year. Your Company is purposely growingthe regeneration sector with projects undertaken for both shorter term profitand longer term investment objectives. In the future, you can expect to see agreater mix of projects and increasing frequency of disposal of developments.This may, as it has done in the past, give a certain 'lumpiness' to our resultsyear-on-year. We are close to concluding a mixed-use development on the site of the formerboatyard. As well as 101 apartments, including affordable allocation, the schemeincludes 35,000 sq ft of commercial space, the majority reserved by the BBC fortheir new South West regional studios. On an adjacent site, another 40,000 sq ftpre-let office scheme is planned. The scheme on Exeter canal-side is progressingwell, as are schemes in St Austell and other regional centres. There are anumber of other schemes where the Company is currently bidding or isshort-listed and to maintain the flow of projects we have recruited additionalregeneration specialists. ReSound (Health) Limited, in which your company holds a 37.2% interest, has nowstarted construction on a health centre in Cattedown, Plymouth, its thirdscheme. The Group's share of results from this joint venture are separatelyshown in the Profit and Loss Account for the first time this year. After the year end, your Company acquired two car parks with 400 parking spaces,in the environs of Sutton Harbour for a total cash consideration of £2,423,530.The cash consideration was funded by the placing of 794,600 new ordinary sharesof 25p each at £3.05 per share. The placing price represented a modest discountof 4.7 per cent on the share price immediately before the issue. The Group isconfident of a satisfactory return from the car parks investment. As previously reported, we expected a decline in profits from our transportsector after the effects of security alerts in August 2006 and the prevailinghigh fuel price. Air Southwest had to contend with other challenges outside itscontrol in the second half year including the temporary closure of the runway atBristol Airport and the doubling in Air Passenger Duty to £10 per domesticflight. The new routes we started last Spring have been disappointing. Wewithdrew the Bristol-Norwich service in October 2006 and Cardiff-Manchesterservices will cease in June 2007. These changes provide Air Southwest withcapacity to operate a newly started Newquay-Cork service, to offer charterservices and to focus on core routes. We are mindful of the new competition onthe Newquay-London route. It is too early to determine the effect of this on ourestablished four times a day service, however we have been very pleased with theloyalty shown by our customers. It has been a difficult year for our youngairline, particularly when contrasted with its early successes, but it ispositive that we have remained profitable and have sufficient flexibility toadapt our business to changing markets. Cornwall County Council, the airport operators, and the Ministry of Defence arenow working to a clear timetable to put in place the infrastructure necessary toconvert Newquay Cornwall Airport into a full civilian airport. We expect thisprocess to be completed by Autumn 2008. Plymouth City Airport continues to offer facilities to commercial airlineoperators, the military and private aviation. The re-introduction of the twicedaily Manchester service has been well received and Air Southwest is consideringnew services from Plymouth for 2008. Following the creation of West Pier Marina last year, we are already seeing avery satisfactory increase in berthing revenues. We have just completed furtherimprovements to our marina facilities and annual berths are again fullyoccupied. In March 2007, we closed the marine engine servicing and watercraftsales businesses that we had operated for the past decade and we also sold ourremaining commercial fishing vessel. These businesses were no longer justifiableon commercial grounds. Costs in connection with closing these businesses havebeen charged to the profit and loss account. Plymouth Fisheries had a bumper final quarter with fish landings at a record.This business has proved to be a stable revenue earner over the 12 years sincethe new complex opened. With business growing year on year, use of the lock atthe entrance to Sutton Harbour has far exceeded anticipated demand. As a result,the lock gates have worn faster than expected and they will be replaced by theEnvironment Agency this Autumn. We have been advised that the lock will need toremain closed intermittently during the refit with the inevitable inconveniencethat it will cause harbour users. The refit is purposely scheduled to take placebetween the summer yachting and spring fishing seasons. The new gates aredesigned to last for thirty years. We have previously reported that Malcolm Naylor will retire from the Board andfrom Air Southwest on 31 May 2007, when his service contract expires. We thankMalcolm for his significant contribution in setting up Air Southwest, which hasoperated a range of domestic scheduled services since October 2003. Starting anairline was a major diversification for the Group and Malcolm's long experiencein the aviation industry has proved invaluable. I am pleased to report thatMalcolm's successor, Jim Cameron, joined us in April 2007. Jim, until recently,was Chief Executive of Loganair, a larger regional airline operating out ofGlasgow. He has also previously held senior positions with British Airways andBrymon Airways. Tim Bacon, who has headed up our property regeneration team for several years,has indicated to the Board that he wishes to work independently in his ownconsultancy and will therefore be relinquishing his executive duties, probablybefore the end of the calendar year. I am delighted to report that he willremain on the board as a non-executive director. It has been my privilege to be your Chairman for the last nine years but, as Iapproach my 65th birthday, I feel it is right for me to step down both from theChair and as a director. During my time with your company we have seenconsiderable change and progress and had a lot of fun along the way. I am veryconfident that we have in place a good team and business mix to provide growthfor shareholders in the future. Michael Knight, who has been a director since2005, will succeed me as Chairman immediately after the AGM. Your Company has had another exciting but challenging year and has started thecurrent year well. With volatility in the transport sector likely to be everpresent, your company will work to achieve core growth from its regenerationactivities. Looking forward, there is plenty in the pipeline and the Boardremains optimistic of your Company's prospects. Ellen Winser Chairman Profit and Loss Account for the year ended 31 March 2007 2007 2006 £'000 *£'000 Turnover 30,688 27,218 Less Share of Joint Venture's Turnover (499) - Group Turnover 30,189 27,218 Cost of Sales (26,297) (22,769) Gross Profit 3,892 4,449 Administrative Expenses (954) (853) Group Operating Profit 2,938 3,596 Share of Operating Profit in Joint Venture 288 - Total Operating Profit 3,226 3,596 Profit on Sale of Fixed Assets 2,141 - 5,367 3,596 Interest Receivable 105 106 Interest Payable and Similar Charges (958) (282)GroupJoint Venture (302) - Profit on Ordinary ActivitiesBefore Taxation 4,212 3,420 Current Taxation (834) (552) Deferred Taxation (432) (481) Taxation on Profit on Ordinary Activities (1,266) (1,033) Profit on Ordinary ActivitiesAfter Taxation and Attributable to Shareholders 2,946 2,387 Earnings per Ordinary 25p share (Basic) 12.09p 9.81pEarnings per Ordinary 25p share (Diluted) 11.83p 9.70p All figures relate to continuing activities. *As restated for prior year adjustment in respect of adoption of FRS 20 - ShareBased Payments. Balance Sheets as at 31 March 2007 The Group The Company 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Fixed AssetsIntangible Assets 576 611 - -Tangible Assets 49,189 56,584 - -InvestmentsInvestments in Joint VenturesShare of gross assets 8,956 - - -Share of gross liabilities (9,023) 75 2,291 2,217Other investments 76 75 2,291 2,217 49,774 57,270 2,291 2,217 Current Assets Stock 3,898 3,145 - -Debtors 6,377 4,939 6,999 6,916Cash at Bank and in Hand 6 4 32 13 10,281 8,088 7,031 6,929 Creditors (14,423) (14,109) (30) (78) (amounts falling due within one year) Net Current (Liabilities)/ Assets comprising: Net Current (Liabilities)/Assets (5,213) (6,952) 6,106 6,080Debtors due after more than one year 1,071 931 895 771 (4,142) (6,021) 7,001 6,851 Total Assets less Current Liabilities 45,632 51,249 9,292 9,068 Creditors (amounts falling due after more (2,644) (10,835) - - than one year) Provisions for Liabilities and Charges (2,828) (2,396) (3) -Deferred Taxation 40,160 38,018 9,289 9,068 Capital and ReservesCalled Up Share Capital 6,112 6,086 6,112 6,086Share Premium Account 2,843 2,797 2,843 2,797Revaluation Reserve 13,056 13,056 - -Investment PropertyRevaluation Reserve 9,435 9,435 - -Other Reserves 348 274 97 23Profit and Loss Account 8,366 6,370 237 162 Equity Shareholders' Funds 40,160 38,018 9,289 9,068 *As restated for prior year adjustment. Consolidated Cash Flow Statement for the year ended 31 March 2007 2007 2006CASH FLOW STATEMENT £'000 £'000 Net Cash Inflow from Operating Activities 1,433 4,144Returns on Investments and Servicing of Finance (995) (522)Taxation (875) (465)Capital Receipts/Expenditure 8,956 (13,976)Equity Dividends Paid (950) (852)Financing (8,125) 11,560 (Decrease) in Cash in the Year (556) (111) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (Decrease) in Cash in the Year (556) (111) Increase in Loans (1,670) (11,558) Loans Repaid 9,866 - Movement in net debt in the year 7,640 (11,669) Net Debt at the start of the year (16,927) (5,258) Net Debt at the end of the year (9,287) (16,927) Consolidated Statement of Total Recognised Gains and Losses for the year ended 31 March 2007 2007 2006 £'000 * £'000 Reported Profit on Ordinary Activities Before Taxation 4,212 3,420 Historical Cost Profit on Ordinary Activities Before 4,212 3,420Taxation Historical Cost Profit for the year retained after Taxation 1,996 1,535and Dividends *as restated for prior year adjustment Segmental analysis 2007 2006 Turnover Cost of Operating Turnover Cost of Operating Sales Profit Sales Profit £'000 £'000 £'000 £'000 £'000 £'000 MarineActivities 4,934 3,987 947 4,571 3,675 896Regeneration 3,283 525 2,758 3,097 1,667 1,430Transport Share ofJoint Venture 499 211 288 - - - 30,688 26,508 4,180 27,218 22,769 4,440 Administrative (954) (853)Expenses Total Operating 3,226 3,596Profit Profit on Sale of 2,141 -Fixed Assets 5,367 3,596 Interest Receivable 105 106 Interest PayableGroup (958) (282)Joint Venture (302) - Profit on OrdinaryActivities BeforeTaxation 4,212 3,420 Segmental Analysis has been grouped under three main headings which cover the three principal activities of the group. Marine activities includes fishing related and marine leisure activities. Regeneration includes property and related activities. Transport includes airport operations and airline operations. The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 March 2007 or 2006 but is derived fromthose accounts. Statutory accounts for 2006 have been delivered to theregistrar of companies, and those for 2007 will be delivered following theGroup's Annual General Meeting. The auditors have reported on those accounts;their report was (i) unqualified, (ii) did not include a reference to anymatters to which the auditors drew attention by way of emphasis withoutqualifying their report and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange