Last checked at 3 Apr 2012 07:00
3 April 2012
SUTTON HARBOUR HOLDINGS PLC
("The Group" and "The Company")
Trading Update
Sutton Harbour Holdings plc, announces its Trading Update for the year ended 31 March 2012.
The year has been one of substantial change which has resulted in a revitalised Company, now better positioned to participate in, and benefit from, various exciting marine and waterfront regeneration opportunities. Going forwards, the cost base has been substantially reduced and the focus now is to maximise the potential of the strong asset base, supported by the more visible stream of recurring incomes, and build on the Company's core credentials as a marine and waterfront regeneration specialist.
As previously stated, as part of the strategy to exit from non-core trading activities, the Company will dispose of its investment in the Cumbria LIFT healthcare project which is now expected to complete in the first half of the next financial year. This deferral, together with certain non-recurring overhead expenditure relating principally to management termination payments, will mean that the overall result, excluding discontinued activities and valuation adjustments, is expected to be marginally lower than current market expectations.
The Company's focus on recurring annual revenues from its tenanted properties has seen a number of improvements: the average length of unexpired leases has risen to 9.6 years (September 2011: 9.2 years; March 2011: 9.2 years); estimated rental value of vacant properties is £189,000 (September 2011: £195,500; March 2011: £262,000); occupancy rate 89.17% (September 2011: 89.13%; March 2011: 85.72% ). These figures include taking advantage of strategic opportunities to terminate tenancies where future value can be identified through redevelopment or reconfiguration.
The underperforming aviation operations were exited with the closure of Plymouth City Airport on 23 December 2011. Results for this business will be disclosed as a discontinued activity in the full year results.
Although the airport has been a negative feature of the Company's performance in recent times, the future use of this 104 acre site will constitute a major strategic regeneration project for both the Company and the City of Plymouth and the two organisations will be working together to achieve best value through alternative use of the site.
In respect of the property development sector generally, it remains challenging but nevertheless the Property business has performed well in this environment and it continues to work towards achieving positive outcomes in order to realise cash and profit where market conditions permit.
Against this background, on 26th March 2012 the Group received £1.3m from the second payment for the fourth tranche of airport land, triggered by the stage completion of the new road adjacent to the airport site. Bank debt stood at £16m at the year end (September 2011: £22m; March 2011: £21m).
Trading by the Fisheries and Marina businesses has been strong throughout the period, building on the good performance of recent years. To ensure these activities continue to evolve and maintain their market positions, the Company expects to make some capital improvements during the next year. There are plans to reconfigure part of Sutton Harbour Marina to cater for the growing proportion of larger vessels which should ensure the harbour's continued position as a key destination in the South West. Further investment in the Fish Market's ice delivery capability is also important to help consolidate its standing in the region.
Following the placing and open offer in January 2012, when the Company raised £5.7m (net of costs) from existing shareholders, it is pleasing to confirm that good progress is being made towards finalising agreements enabling the planned expenditure on and the construction of the new Kingpoint Marina facility, at Millbay, Plymouth, later this year so that the Company should be able to market the new marina at forthcoming boat shows in time for the 2013/2014 season.
Chairman Michael Knight stated that "the last 12 months has seen the business stabilised with the Company well-positioned to continue driving value for shareholders from its asset base and at the same time carefully and diligently pursuing strategic opportunities in line with its stated vision and strategy for growth".
The Company expects to release its preliminary announcement on or around 27 June 2012
Enquiries:
Sutton Harbour Holdings plc
Jason Schofield - Chief Executive
Natasha Gadsdon - Finance Director
01752 204186
Arden Partners plc
Richard Day
Jamie Cameron
0207 614 5917
Newgate Theadneedle
Graham Herring
Terry Garrett
020 7653 9850