Sutton Harbour Holdings Regulatory News (SUH)

15 December 2016

SUTTON HARBOUR HOLDINGS PLC ("the Group")

Interim results for the six month period to 30 September 2016

Sutton Harbour Holdings plc ("Sutton Harbour", "the Company"), the AIM listed marine and waterfront regeneration specialist, announces its interim results for the six month period to 30 September 2016. 

Financial Highlights

· Adjusted* profit before tax £0.232m (2015: £0.249m);

· Loss before tax of £0.038m (2015: profit of £1.261m);

· Net assets of £40.025m (31 March 2016: £40.869m);

· Net assets per share 41.6p (31 March 2016: 42.4p);

· Net debt £22.737m (31 March 2016: £22.213m).

*Excluding fair value adjustments

Highlights

· Further representation submitted to Joint Local Plan public consultation in respect of Former Airport Site and Sutton Harbour

· Marketing process underway for Sugar House (East Quay)

· Sutton Harbour hosted the start of the Trans Atlantic Race 2016

· Appointed Rothschild to undertake a strategic review of options (21 April 2016) which could include a sale of the Company

Graham Miller, Chairman, commented:

"The Group has clear priorities: to pursue vigorously the planning allocation for the Former Airport Site, to accelerate the progress of other regeneration projects and to grow revenue and profits at the marine businesses and the investment property portfolio."

 For further information, please contact

Chairman and Chief Executive's Statement

Excluding fair value adjustments, the adjusted profit before taxation for the six month period ending 30 September 2016 was £0.232m (2015: £0.249m). Gross profit generated by the trading activities (excluding impairment of assets) was £1.513m compared with £1.465m for the comparative period in 2015.

As at 30 September 2016, net assets were £40.025m (41.6p per share), having decreased slightly from £40.869m at 31 March 2016 (42.4p per share). The decrease of £0.844m (0.8p per share) incorporates the results of the independent property portfolio valuation as at 30 September 2016 which, despite a valuation adjustment surplus of £0.283m (2015: £1.012m) attributable to the investment property portfolio, gave rise to an overall deficit of £1.012m (2015: surplus £1.015m). This reflects the owner occupied portfolio valuation deficit of £1.295m (2015: surplus: £0.003m) due to more challenging trading conditions for the Marina at Sutton Harbour with general valuation sentiment towards marina assets impacting King Point Marina. The Fisheries valuation was unchanged and car parks showed a surplus in the six-month period since the previous external valuation.

Net debt (comprising net bank debt and outstanding finance leases) at 30 September 2016 increased slightly in the period to £22.737m from £22.213m at 31 March 2016. The increase in debt reflects investment into regeneration projects and also the annual cash cycle. This peaks in March annually when rents and marinas fees paid in advance are received. Gearing stood at 56.8% at 30 September 2016, up from 54.4% at 31 March 2016.

The Board does not recommend the payment of an interim dividend.

Marine Businesses

Plymouth Fisheries at Sutton Harbour has traded well in the first half with landings in line with the same period last year. Trading so far in the second half year continues to be encouraging. Following the completion of the ice plant and chill chain upgrades the Group plans further investment alongside proposed grant funding to ensure Plymouth Fisheries retains its market leading position.

The Marina at Sutton Harbour hosted the start of the Transat race in April 2016 and other events in the summer season. The Group continues to invest in improved facilities for berth holders such as WiFi connectivity at both marinas. Occupancy at King Point Marina continues to grow and additional pontoons will shortly be installed to extend berthing space. The Marina at Sutton Harbour has experienced a modest drop in occupancy and a plan has been put in place in response.

Real Estate

At the start of the year four tenants served notice resulting in occupancy falling to 87%. The vacant premises are being marketed with negotiations in progress for the first new occupation expected early in the New Year. A number of rent reviews for existing tenancies are currently underway and are expected to result in an overall rental uplift.

Car Parking

The car parks showed strong revenue growth during the summer season. Further improvements to overall presentation and signage will take place over the winter months, following the success of the new and efficient LED lighting installation.

Regeneration

An update on the major regeneration projects currently being promoted is as follows:

Former Airport Site

The final Department for Transport Review of the viability of re-opening the former Plymouth Airport is still awaited and the Group will update investors as soon as it is available. The case for alternative uses for the site to create much needed homes, jobs and first class community sports facilities in conjunction with a significant infrastructure upgrade to the University of St Mark and St John is compelling and clearly in the best interests of the people of Plymouth. The Plymouth and South West Devon Joint Local Plan will be subject to an independent Government Inspector's scrutiny at the 'Examination in Public' ("EiP") currently scheduled for Autumn 2017. The Group's case for justifying alternative use of the former airport site will set out clearly before the independent inspector at the EiP.

The Group has freehold and long leasehold legal interests at the site and shareholders can be confident that the Board remains determined to realise the optimum value from this strategic asset.

Sugar House, East Quay

The Group is actively marketing the site to potential joint venture partners for the development of a residential led scheme together with the potential for car parking, retail, restaurant and student accommodation.

'The Boardwalk' at Vauxhall Quay

Following the success in achieving detailed planning permission for 'The Boardwalk' scheme, a pier-like structure arranged as two large restaurant units and a small pavilion unit totalling approximately 7,800 sq ft (724.3m2), the Group is still awaiting final consents from the Marine Management Organisation which it anticipates will be forthcoming during the early part of 2017. Strong interest remains from potential tenants on a pre-let basis.

Outlook

The Board has continued to work with its advisers, Rothschild, on the Strategic Review of Options for the future of the Group. The process remains ongoing and the Board will update shareholders in due course.

The Group has clear priorities: to pursue vigorously the planning allocation for the Former Airport Site, to accelerate the progress of other regeneration projects and to grow revenue and profits at the marine businesses and from the investment property portfolio.

Graham S Miller Jason W H Schofield

Chairman Chief Executive

15 December 2016

1. General information

This consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2016 were approved by the Board of Directors on 27 June 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006.

Copies of the Group's financial statements are available from the Company's registered office, Tin Quay House, Sutton Harbour, Plymouth, PL4 0RA and on the Company's website www.sutton-harbour.co.uk.

This consolidated interim financial information has not been audited.

2. Basis of preparation

The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) interpretations as endorsed by the European Union, and those parts of the Companies Acts 2006 as applicable to companies reporting under IFRS.

Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2016, as described in those annual financial statements.

Adoption of new International Financial Reporting Standards

The following new standards, amendments to standards or interpretations have been issued, but are not effective for the financial year beginning 1 April 2016 and have not been adopted early:

IFRS 15 Revenue from Contracts with Customers: *1 January 2018

IFRS 9 Financial Instruments: * 1 January 2018

* mandatory effective date is periods commencing on or after

Accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

The only significant change to estimates and judgements since the signing of the financial statements for the year ended 31 March 2016 is that King point Marina is now carried at an independent external valuation rather than its value in use.

3. Segment information

Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

The Board of Directors considers the business from an operational perspective as having only one geographical segment, with all operations being carried out in the United Kingdom.

The Board of Directors considers the performance of the operating segments using operating profit. The segment information provided to the Board of Directors for the reportable segments for the period ended 30 September 2016 is as follows:

3. Segment Information (continued)

3. Segment Information (continued)

3. Segment Information (continued)

Unallocated assets included in total assets and unallocated liabilities included in total liabilities are not split between segments as these items are centrally managed.

4. Taxation

The Company has applied an effective tax rate of 20% (2015: 20%) based on management's best estimate of the tax rate expected for the full financial year and is reflected in a movement in deferred tax.

5. Dividends

The Board of Directors do not propose an interim dividend (2015: nil).

6. Earnings per share

Basic Earnings per Share:

Basic earnings per share have been calculated using the loss for the period of £31,000 (2015: profit £1,009,000, year ended 31 March 2016 profit £1,497,000). The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 96,277,086 (2015: 96,277,086; year ended 31 March 2016: 96,277,086) has been used in our calculation.

Diluted Earnings per Share:

Diluted earnings per share uses an average number of 96,277,086 (2015: 96,277,086; year ended 31 March 20156 96,277,086) ordinary shares in issue, and takes account of the outstanding options under the SAYE scheme in accordance with IAS 33 'Earnings per share'.

* For the 6 months ended 30 September 2016, the year ended 31 March 2016, and the 6 months ended 30 September 2015, there is no adjustment for the effect of all dilutive potential ordinary shares because the exercise prices of the options are greater than the average market price of the shares during the year.

7. Property valuation

Freehold land and buildings and investment property have been independently valued by Jones Lang LaSalle as at 30 September 2016, in accordance with the Practice Statements in the Valuations Standards (The Red Book) published by the Royal Institution of Chartered Surveyors.

A further valuation will be commissioned for the year ending 31 March 2017, as in previous years.

8. Cash and cash equivalents

9. Provisions

10. Cash flow statements

11. Capital Commitments

At 30 September 2016 the Group has no capital commitments.