Last checked at 11 Jul 2019 07:00
11 July 2019
SUTTON HARBOUR GROUP PLC ("the Group")
Preliminary results for the year ended 31 March 2019
Sutton Harbour Group plc ("Sutton Harbour", "the Company"), the AIM listed waterfront regeneration and destination specialist, announces preliminary results for the year ended 31 March 2019.
Highlights
· In November 2018, the Company received planning approval for two new residential schemes at Sutton Harbour: 'Harbour Arch Quay' and 'Sugar Quay' together with approval for a two storey extension to the existing multi-storey Harbour Car Park.
· In December 2018 the Company held a general meeting at which shareholders approved the issue of 10,344,951 new ordinary shares via an Open Offer to existing shareholders. This issue was fully subscribed and resulted in a fresh equity injection of £3 million (before costs) to be used in the ongoing development of the Company including pre-construction costs in respect of planning consented schemes 'Harbour Arch Quay' and 'Sugar Quay' and to meet capital maintenance costs and other funding requirements across its ordinary and development activities.
· In March 2019, the Government Inspectors' report concerning the Local Authority's new planning framework was issued which affirmed safeguarding for a period not to exceed five years of the former airport site for possible general aviation use.
· In April 2019, the Company changed its name to Sutton Harbour Group plc and is currently rolling out its new corporate identity
Financial
· Adjusted profit before tax* £0.072m (2018: loss £0.136m)
· Net financing costs £0.901m (2018: £0.897m)
· Net Assets £45.7m (2017: £39.3m)
· Valuation of property portfolio** £45.7m (2018: £42.7m)
· Year-end net debt £21.4m (2017: £21.9m)
*Before accounting for fair value adjustments on assets and costs of change in ownership.
**Comprises investment and owner occupied portfolios. Excludes land held as development inventory.
Philip Beinhaker, Executive Chairman, commented:
"The Company has continued to deliver on its vision to be the leading marine, waterfront regeneration and destination specialist in Southern England in accordance with its stated strategy. We have delivered major new planning consents, completed in-depth reviews of other trading activities and put strategic plans for growth in place".
For further information, please contact
Sutton Harbour Group plc Philip Beinhaker - Executive Chairman Natasha Gadsdon - Finance Director
| 01752 204186 |
Arden Partners (Nomad and Broker) Paul Shackleton Benjamin Cryer
| 020 7614 5900 |
|
|
Executive Chairman's Statement
Year Ended 31 March 2019
Shareholder's Overview
· In November 2018, the Company received planning approval for two new residential schemes at Sutton Harbour: 'Harbour Arch Quay' and 'Sugar Quay' together with approval for a two storey extension to the existing multi-storey Harbour Car Park.
· In December 2018 the Company held a general meeting at which shareholders approved the issue of 10,344,951 new ordinary shares via an Open Offer to existing shareholders. This issue was fully subscribed and resulted in a fresh equity injection of £3 million (before costs) to be used in the ongoing development of the Company including pre-construction costs in respect of planning consented schemes 'Harbour Arch Quay' and 'Sugar Quay' and to meet capital maintenance costs and other funding requirements across its ordinary and development activities.
· In March 2019, the Government Inspectors' report concerning the Local Authority's new planning framework was issued which affirmed safeguarding for a period not to exceed five years of the former airport site for possible general aviation use.
· In April 2019, the Company changed its name to Sutton Harbour Group plc and is currently rolling out its new corporate identity
Results and Financial Position
The adjusted profit before taxation for the year was £0.072m (2018: £0.135m loss) which excludes non-cash fair value adjustments and the costs in connection with the change of ownership. The profit before taxation for the year under review as per the Income Statement, inclusive of the aforementioned adjustments, was £1.516m (2018: £2.502m Loss before taxation).
As at 31 March 2019, net assets were £45.732m (2018: £39.328m), representing 39.4p per share (2018: 37.2p per share). The increase follows the issue of 10,344,951 new ordinary shares at 29 pence each, providing new capital of £3m, before costs of £73,000, and also the valuation of the Company's property assets which gave rise to an overall valuation surplus of £3.084m. Gearing as at 31 March 2019 stood at 46.7% (2018: 55.6%). Net finance costs increased to £0.901m in the year (2018: £0.897m) as the bank borrowing rate had increased by 0.25% and average borrowing compared year to year was higher.
Net debt (including finance leases) decreased to £21.373m at 31 March 2019 from £21.858m at 31 March 2018. Development Inventories increased by £2.281m reflecting the investment required to progress three schemes to planning consented status and a further £0.303m was invested in the Company's infrastructure asset base.
The board does not recommend payment of a dividend on the year's results.
Directors and Staff
Early in the financial year Philip Beinhaker was appointed Executive Chairman and Jason Schofield, Chief Executive left the Company in July 2018. The board has advertised a Chief Operating Officer position and intends to announce a new board appointment in the near future. There have been no other changes at board level during the year.
Headcount as at 31 March 2019 decreased to 30 (31 March 2018: 33) as the Company has continued to outsource certain specialist roles following some voluntary resignations.
Operations Report
MARINE
Overall, the marine segment has performed steadily during the year. The Marinas both achieved modest growth in revenue and occupancy and this encouraging trend has continued into the start of the new 2019/20 berthing season. Results from fishing activities were undermined by a poorer level of fish stocks in local waters with landings of fish by value down 23.5% on the previous financial year. Despite lower revenue from fish landing dues, other revenues including fuel sales, ice sales and rentals of property at the Plymouth Fisheries facility held up well during the year under review.
REAL ESTATE AND CAR PARKING
Focused marketing of vacant property has resulted in the occupancy rate increasing to 94% as at 31 March 2019 from 87% as at 31 March 2018. During the year seven new tenancies have been completed, and the Company has been pleased to see more businesses, in both professional businesses services and restaurant sectors, choose Sutton Harbour as a trading base.
Car Parking revenue increased slightly during the year, compared to the previous year. Parking at the Harbour Car Park continued to be affected by the out of action footbridge which links this car park more directly to the eastern side of the harbour where popular attractions including the Barbican and the Hoe are situated. The bridge was returned to full service on 19 April 2019 after a new bearing was fabricated and the structure recommissioned in time for the busier summer season. Early in 2019 the car parks contract with a third party specialist management company was renewed on improved terms.
REGENERATION
Sutton Harbour
The Company gained planning approval for two new landmark residential led schemes for Sutton Harbour in November 2018. The Harbour Arch Quay development of 14 flats and The iconic Sugar Quay building with 170 apartments are both due to start construction by the end of the year. The two storey Harbour Car Park extension, which will accommodate a further 114 parking spaces, is also due to start late 2019, with the additional parking to be available for use in summer 2020. The Company is engaging with local stakeholders, including Plymouth City Council, on events to be held in 2020 to commemorate the 400th anniversary of the departure of the Pilgrim Fathers on the Mayflower vessel to America. The historic port of Sutton Harbour is the focal point for commemorative events and the Company is making ready for the expected high number of visitors to the area.
Former Airport Site
The Company continues to manage and maintain the Former Airport Site which closed in December 2011. The 113 acre site, which is already surrounded by urban development, is ideally located for mixed urban use, and can deliver a sustainable built environment for the economic and social wellbeing of the people of Plymouth. The safeguard of the site for possible general aviation use is provided for the next five years, after which the Government Inspectors consider a prolonged safeguard to be inappropriate due to the value of the land for urban uses. The Company had prepared an initial masterplan for mixed use development for the site and continues to refine this to ensure its formulation as a development programme is deliverable in phases to meet planning framework policy and an aspiration for a new sustainable urban neighbourhood.
SUMMARY AND OUTLOOK
The Company has continued to deliver on its vision to be the leading marine, waterfront regeneration and destination specialist in Southern England in accordance with its stated strategy. We have delivered major new planning consents, completed in-depth reviews of other trading activities and put strategic plans for growth in place.
PHILIP BEINHAKER
Executive Chairman
10 July 2019
Consolidated Income Statement
For the year ended 31 March 2019
|
| 2019 | 2018 | ||
|
| £000 | £000 | ||
|
|
|
| ||
|
|
|
| ||
Revenue |
| 6,893 | 6,503 | ||
|
|
|
| ||
Cost of sales |
| (4,686) | (4,367) | ||
|
|
|
| ||
Gross profit |
| 2,207 | 2,136 | ||
|
|
|
| ||
Fair value adjustments on investment properties and fixed assets |
| 1,444 | (626) | ||
Administrative expenses |
| (1,234) | (1,374) | ||
Exceptional costs of change in ownership |
| - | (1,741) | ||
|
|
|
| ||
Operating profit/(loss) |
| 2,417 | (1,605) | ||
|
|
|
| ||
Finance income |
| 1 | - | ||
Finance costs |
| (902) | (897) | ||
Net finance costs |
| (901) | (897) | ||
|
|
|
| ||
Profit/(loss) before tax from continuing operations |
| 1,516 | (2,502) | ||
Taxation credit on profit/(loss) from continuing operations |
| 315 | 304 | ||
Profit/(loss) for the year from continuing operations |
| 1,831 | (2,198) | ||
|
|
|
| ||
Profit/(loss) for the year attributable to owners of the parent |
| 1,831 | (2,198) | ||
|
|
|
| ||
|
|
|
| ||
Basic and diluted earnings/(loss) per share |
|
|
| ||
from continuing operations |
| 1.68p | (2.24)p | ||
|
|
|
| ||
|
|
|
| ||
|
|
| |||
Consolidated Statement of Other Comprehensive Income for the year ended 31 March 2019 |
|
|
|
|
| 2019 | 2018 |
|
| £000 | £000 |
|
|
|
|
|
|
|
|
Profit/(loss) for the year |
| 1,831 | (2,198) |
Items that will not be reclassified subsequently to profit or loss: |
|
|
|
Revaluation of property, plant and equipment |
| 1,640 | (1,624) |
Items that may be reclassified subsequently to profit or loss: |
|
|
|
Effective portion of changes in fair value of cash flow hedges |
| 6 | 70 |
|
|
|
|
Other comprehensive income for the year, net of tax |
| 1,646 | (1,554) |
|
|
|
|
Total comprehensive income for the year attributable to owners of the parent |
| 3,477 | (3,752) |
Consolidated Balance Sheet
As at 31 March 2019
| 2019 | 2018 |
| £000 | £000 |
|
|
|
Non-current assets |
|
|
Property, plant and equipment | 26,632 | 23,973 |
Investment property | 19,425 | 19,055 |
Inventories | 12,448 |
|
|
|
|
| 58,505 | 43,028 |
|
|
|
Current assets |
|
|
Inventories | 11,119 | 21,276 |
Trade and other receivables | 2,283 | 2,170 |
Cash and cash equivalents | 1,296 | 2,767 |
Tax recoverable | (5) | 8 |
|
|
|
| 14,693 | 26,221 |
|
|
|
Total assets | 73,198 | 69,249 |
|
|
|
Current liabilities |
|
|
Trade and other payables | 1,496 | 1,633 |
Finance lease liabilities | 122 | 117 |
Deferred income | 1,398 | 1,434 |
Provisions | 70 | 70 |
Derivative financial instruments | - | 6 |
|
|
|
| 3,086 | 3,260 |
|
|
|
Non-current liabilities |
|
|
Bank loans | 22,500 | 24,350 |
Finance lease liabilities | 47 | 158 |
Deferred government grants | 646 | 646 |
Deferred tax liabilities | 1,023 | 1,338 |
Provisions | 164 | 169 |
|
|
|
| 24,380 | 26,661 |
|
|
|
Total liabilities |
|
|
| 27,466 | 29,921 |
Net assets | 45,732 | 39,328 |
|
|
|
Issued capital and reserves attributable to owners of the parent |
|
|
Share capital | 16,266 | 16,162 |
Share premium | 10,695 | 7,872 |
Other reserves | 11,696 | 10,050 |
Retained earnings | 7,075 | 5,244 |
|
|
|
Total equity | 45,732 | 39,328 |
Consolidated Statement of Changes in Equity
For the year ended 31 March 2019
|
|
|
|
|
|
|
| |||
| Share capital | Share premium | Revaluation reserve | Merger reserve | Hedging reserve | Retained earnings | Total equity | |||
|
|
| ------------Other reserves------------ |
|
| |||||
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | |||
|
|
|
|
|
|
|
| |||
Balance at 1 April 2017 | 16,069 | 5,368 | 7,809 | 3,871 | (76) | 7,442 | 40,483 | |||
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
Comprehensive income/(expense) |
|
|
|
|
|
|
| |||
Loss for the year | - | - | - | - | - | (2,198) | (2,198) | |||
Other comprehensive expense |
|
|
|
|
|
|
| |||
Revaluation of property, plant and equipment | - | - | (1,624) | - | - | - | (1,624) | |||
Effective portion of changes in fair value of cash flow hedges | - | - | - | - | 70 | - | 70 | |||
|
|
|
|
|
|
|
| |||
Total other comprehensive expense | - | - | (1,624) | - | 70 | - | (1,554) | |||
Total comprehensive income/(expense) | - | - | (1,624) | - | 70 | (2,198) | (3,752) | |||
Transactions with owners of the parent Purchase of shares |
93 |
2,504 |
- |
- |
- |
- |
2,597 | |||
Total balance at 31 March 2018 | 16,162 | 7,872 | 6,185 | 3,871 | (6) | 5,244 | 39,328 | |||
Balance at 1 April 2018 | 16,162 | 7,872 | 6,185 | 3,871 | (6) | 5,244 | 39,328 | |||
|
|
|
|
|
|
|
| |||
Comprehensive income/(expense) |
|
|
|
|
|
|
| |||
Profit for the year | - | - | - | - | - | 1,831 | 1,831 | |||
Other comprehensive income/(expense) |
|
|
|
|
|
|
| |||
Revaluation of property, plant and equipment | - | - | 1,640 | - | - | - | 1,640 | |||
Effective portion of changes in fair value of cash flow hedges | - | - | - | - | 6 | - | 6 | |||
|
|
|
|
|
|
|
| |||
Total other comprehensive expense |
|
| 1,640 |
| 6 |
| 1,646 | |||
Total other comprehensive income/(expense) | - | - | 1,640 | - | 6 | 1,831 | 3,477 | |||
Transactions with owners of the parent |
|
|
|
|
|
|
| |||
Purchase of shares | 104 | 2,823 | - | - | - | - | 2,927 | |||
Total balance at 31 March 2019 | 16,266 | 10,695 | 7,825 | 3,871 | - | 7,075 | 45,732 | |||
Consolidated Cash Flow Statement
For the year ended 31 March 2019
| 2019 | 2018 |
| £000 | £000
|
Cash used from total operating activities | (1,181) | (886) |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
Net expenditure on investment property | (60) | - |
Expenditure on property, plant and equipment | (243) | (227) |
Proceeds from sale of plant and equipment | - | 12 |
|
|
|
Net cash used in investing activities | (303) | (215) |
|
|
|
Cash flows from financing activities |
|
|
Proceeds from issue of shares | 3,000 | 2,750 |
Expenses of share issuance | (73) | (152) |
Interest paid | (958) | (897) |
Loan (repayment) | (1,850) | - |
Loan drawdown | - | 1,550 |
Cash payments of finance leases | (106) | (86) |
|
|
|
Net cash generated from financing activities | 13 | 3,165 |
|
|
|
Net (decrease) / increase in cash and cash equivalents | (1,471) | 2,064 |
|
|
|
Cash and cash equivalents at beginning of the year | 2,767 | 703 |
|
|
|
Cash and cash equivalents at end of the year | 1,296 | 2,767 |
Reconciliation of financing activities For the year ended 31 March 2019 |
|
|
|
|
|
| 2019 | Cash flow | 2018 | Cash flow | 2017 |
| £000 | £000 | £000 | £000 | £000 |
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans | 22,500 | (1,850) | 24,350 | 1,550 | 22,800 |
Finance leases | 169 | (106) | 275 | (86) | 361 |
Long term debt | 22,669 | (1,956) | 24,625 | 1,464 | 23,161 |
Notes
Segment Results
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 the Group has only one geographical segment, with all operations being carried out in the United Kingdom.
The Board of Directors assesses the performance of the operating segments using operating profit. The segment information provided to the Board of Directors for the reportable segments for the year ended 31 March 2019 is as follows:
Year ended 31 March 2019 | Marine | Real Estate | Car Parking | Regeneration | Total |
| £000 | £000 | £000 | £000 | £000 |
Revenue | 4,896 | 1,474 | 523 | - | 6,893 |
|
|
|
|
|
|
Segmental Operating Profit before Fair value adjustment and unallocated expenses | 1,057 | 941 | 350 | (141) | 2,207 |
Fair value adjustment on investment properties and fixed assets | 1,134 | 310 | - | - | 1,444 |
|
|
|
|
| 3,651 |
Unallocated: |
|
|
|
|
|
Administrative expenses |
|
|
|
| (1,234) |
Operating profit |
|
|
|
| 2,417 |
|
|
|
|
|
|
Financial income |
|
|
|
| 1 |
Financial expense |
|
|
|
| (902) |
Profit before tax from continuing activities |
|
|
|
| 1,516 |
Taxation |
|
|
|
| 315 |
Profit for the year from continuing operations |
|
|
|
| 1,831 |
Depreciation charge |
|
|
|
|
|
Marine |
|
|
|
| 314 |
Car Parking |
|
|
|
| 33 |
Administration |
|
|
|
| 11 |
|
|
|
|
| 358 |
Year ended 31 March 2018 | Marine | Real Estate | Car Parking | Regeneration | Total |
| £000 | £000 | £000 | £000 | £000 |
Revenue | 4,578 | 1,414 | 511 | - | 6,503 |
|
|
|
|
|
|
Gross profit prior to non-recurring items | 971 | 946 | 318 | (99) | 2,136 |
Segmental Operating Profit before Fair value adjustment and unallocated expenses | 971 | 946 | 318 | (99) | 2,136 |
Fair value adjustment on investment properties and fixed assets | (221) | (405) | - | - | (626) |
|
|
|
|
| 1,510 |
Unallocated: |
|
|
|
|
|
Administrative expenses |
|
|
|
| (1,374) |
Exceptional costs of change in ownership |
|
|
|
| (1,741) |
Operating loss |
|
|
|
| (1,605) |
|
|
|
|
|
|
Financial income |
|
|
|
| - |
Financial expense |
|
|
|
| (897) |
Loss before tax from continuing activities |
|
|
|
| (2,502) |
Taxation |
|
|
|
| 304 |
Loss for the year from continuing operations |
|
|
|
| (2,198) |
Depreciation charge |
|
|
|
|
|
Marine |
|
|
|
| 297 |
Car Parking |
|
|
|
| 12 |
Administration |
|
|
|
| 16 |
|
|
|
|
| 325 |
Assets and liabilities |
|
|
| 2019 £000 | 2018 £000 |
Segment assets: |
|
|
Marine | 23,514 | 20,882 |
Real Estate | 19,892 | 19,460 |
Car Parking | 4,456 | 4,233 |
Regeneration | 23,574 | 21,414 |
Total segment assets | 71,436 | 65,989 |
Unallocated assets: |
|
|
Property, plant & equipment | 61 | 78 |
Trade & other receivables | 405 | 415 |
Cash and cash equivalents | 1,296 | 2,767 |
Total assets | 73,198 | 69,249 |
| 2019 £000 | 2018 £000 |
Segment liabilities: |
|
|
Marine | 1,897 | 1,858 |
Real Estate | 575 | 705 |
Car Parking | 130 | 131 |
Regeneration | 1,085 | 938 |
Total segment liabilities | 3,687 | 3,632 |
Unallocated liabilities: |
|
|
Bank overdraft & borrowings | 22,669 | 24,625 |
Trade & other payables | 87 | 320 |
Financial derivatives | - | 6 |
Deferred tax liabilities | 1,023 | 1,338 |
Tax payable | - | - |
Total liabilities | 27,466 | 29,921 |
|
|
|
Additions to property, plant and equipment |
|
|
|
|
|
Marine | 183 | 227 |
Car Parking | 22 | - |
Unallocated | 38 | - |
Total | 243 | 227 |
Unallocated assets included in total assets and unallocated liabilities included in total liabilities are not split between segments as these items are centrally managed.
Unallocated expenses include central administrative costs that cannot be split between the various business segments because they are incurred in assisting the Group generate revenues across all business segments.
Revenue can be divided into the following categories:
| 2019 | 2018 |
| £000 | £000 |
|
|
|
Sale of goods | 2,357 | 2,289 |
Rental income and service recharges | 1,614 | 1,547 |
Provision of services | 2,922 | 2,667 |
|
|
|
| 6,893 | 6,503 |
No revenues from any one customer represented more than 10% of the Group's revenue for the year.
Going Concern
The Group's forecasts and projections, taking account of reasonably foreseeable possible changes in trading performance, show that the Group should be able to operate within the level of the facilities and covenants over a period of at least twelve months. The covenants measure interest cover, debt to fair value and capital expenditure.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group, therefore, continues to adopt the going concern basis in preparing its financial statements.
Directors' Statement
The preliminary results for the year ended 31 March 2019 and the results for the year ended 31 March 2018are prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted by the European Union (IFRS). The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 31 March 2019.
The Board of Sutton Harbour Group plc approved the release of this audited preliminary announcement on 28 June 2019.The preliminary financial information has been extracted from the Annual Report and audited Financial Statements for the year ended 31 March 2019, which will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company. These audited Financial Statements include the auditors' report which, whilst unqualified, contains reference by way of emphasis to the disclosures concerning the potential impact of government reports and Plymouth's planning strategy upon the valuation of the former airport site, which is held as inventory. The auditors' report does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The report will also be available on the investor relations page of our website (www.suttonharbourholdings.co.uk). Further copies will be available on request and free of charge from the Company Secretary at Sutton Harbour Office, Guy's Quay, Sutton Harbour, Plymouth, PL4 0ES.