Preliminary Results

23 Jun 2005 10:06

Mountview Estates PLC23 June 2005 MOUNTVIEW ESTATES P.L.C. CHAIRMAN'S STATEMENT It would, of course, be a pleasure to again be reporting increases in turnover,profits and dividends but like every other business we have our quieter timesand history shows that no business goes forever upwards. During most of thetwelve months under review the housing market has undoubtedly been a far tougherenvironment in which to operate and economic uncertainties continue despite anyanswers which may have been provided by the result of the general election.Nevertheless it is a pleasure to thank my loyal colleagues and staff for alltheir hard work and endeavour in producing results which are as good as theycould be given the circumstances. As can be seen from the financial highlights on the opposite page Profit BeforeTax is down by a greater percentage than Turnover and Gross Profit. This islargely due to the increase of £600,000 in interest charges which I predicted,last year, would have a significant impact on our results for the next fewyears. It is also true that our gearing remains low enough to give us theflexibility to take good purchasing opportunities if they come along. Whilst there has been no single outstanding purchase during the last year wehave, I believe, continued to make the right purchases at the right prices.There may have been a greater emphasis on the purchase of life tenancies but wetry to maintain a good balance between the different types of investment and theareas in which they are situated. Whilst the typical life tenancy can be boughtat a greater discount to vacant possession value, than the typical regulatedtenancy, we have to be mindful that there is negligible income from lifetenancies. Whilst gross rental income has increased slightly Turnover has fallen by £6.3million. This is not because house prices have dropped significantly but, aspreviously suggested, because it is taking longer to conclude each sale afterobtaining vacant possession. The number of properties coming vacant has notfallen but it is taking longer to finalise each sale. I have previously been able to say that our gross rental income exceeds thecombined total of our administrative expenses, interest payments and dividendpayments. There is now a small deficit on this calculation which is more thanexplained by the surge in interest payments. Nevertheless your Board is able torecommend an increase of 4 pence per share making a final dividend of 82 penceper share which means that the total dividends of 126 pence per share are threeand a half times covered by the earnings per share of 441 pence. Our profits for the last five years, including the latest figure of £24.5million, average over £23.3 million whereas as recently as 1999 we wereenthusing about a Profit Before Tax of £13.1 million which was then a recordresult for this Company. I think that it is fair to say that the Company is nowproducing profits at a significantly higher level than those of a few years agoand it is reasonable to assume that dividends can at least be maintained at thelevel recommended by your Board this year. This Company has always practicedtight financial control but, whilst we will continue to keep a strong grip onthe Company's finances, growth will not be stifled. The Company's new financial year has started quietly but I attribute this to thecontinuing reluctance of purchasers to commit to a deal which situation mayimprove when there is more certainty about government policies. To conclude it is disappointing to report falls in turnover and profits butnevertheless your Board is able to recommend a dividend increase in excess ofthe rate of inflation. As the Company's shareholders may be aware, the Sinclair family has always helda substantial amount of shares in the Company and the family grouping has beeninterpreted to be acting as a concert party (the "Concert Party") for thepurposes of the City Code on Takeovers and Mergers. As a result of areorganisation of certain of the Sinclair family's interests, shares in theCompany which had previously been held by certain members of the Concert Partyare no longer being treated as held by the Concert Party. Due to thisreorganisation and the addition also of certain other shareholdings, the netaggregate shareholding of the Concert Party has accordingly been reduced toapproximately 53 per cent. of the issued share capital of the Company. MOUNTVIEW ESTATES P.L.C. BALANCE SHEETS AS AT 31ST MARCH Mountview Estates P.L.C. Group 2005 2004 2005 2004 £000 £000 £000 £000 FIXED ASSETS Tangible assets 2,747 2,539 25,289 24,675Investments 18,276 18,276 - - --------- --------- --------- --------- 21,023 20,815 25,289 24,675 ========= ========= ========= ========= CURRENT ASSETSStocks 168,199 165,763 174,775 170,116Debtors 259 132 319 178Cash at bank and in hand 2,187 333 2,288 454 --------- --------- --------- --------- 170,645 166,228 177,382 170,748 CREDITORS: Amounts falling duewithin one year (38,077) (34,716) (38,579) (35,343) --------- --------- --------- ---------NET CURRENT ASSETS 132,568 131,512 138,803 135,405 --------- --------- --------- ---------TOTAL ASSETS LESS CURRENTLIABILITIES 153,591 152,327 164,092 160,080 CREDITORS: Amounts falling dueafter more than one year (45,260) (54,368) (29,534) (38,138) --------- --------- --------- --------- 108,331 97,959 134,558 121,942 ========= ========= ========= ========= CAPITAL AND RESERVES Called up share capital 195 195 195 195Revaluation reserve - - 6,758 6,427Capital redemption reserve 55 55 55 55Capital reserve 25 25 25 25Other reserves 39 39 56 56Profit and loss account 108,017 97,645 127,469 115,184 --------- --------- --------- --------- 108,331 97,959 134,558 121,942 ========= ========= ========= ========= MOUNTVIEW ESTATES P.L.C. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2005 2004 £000 £000 Net Cash Inflow From Operating Activities 23,203 3,968 Servicing of Finance (3,979) (3,192) Taxation (8,856) (8,645) Capital Expenditure And Financial Investment (82) (125) Equity Dividends Paid (4,754) (3,743) -------- --------Cash Inflow/(Outflow) Before Financing 5,532 (11,737) Financing (5,914) 13,273 -------- --------(Decrease)/Increase In Cash (382) 1,536 ======== ======== Reconciliation of net cashflow movement in net Debt (Decrease)/Increase in cash in the period (382) 1,536 Net cash outflow/(inflow) from bank loans 9,279 (13,923) Net cash (inflow)/outflow from other loans (3,365) 650 -------- --------Change in net debt 5,532 (11,737) Net debt at 1 April 2004 (63,902) (52,165) -------- --------Net debt at 31 March 2005 (58,370) (63,902) ======== ======== MOUNTVIEW ESTATES P.L.C. STATEMENT OF PROFITS FOR YEARS ENDED 31ST MARCH 2005 2004 £000 £000Turnover 48,778 55,087 ======= ======= Operating Profit 28,001 31,799 Profit on disposal of fixed assets 325 - Deduct: Interest Charges (3,809) (3,206) ------- -------Profit on ordinary activities before taxation 24,517 28,593 Taxation (7,321) (8,584) ------- -------Profit on ordinary activities after taxationattributable to shareholders 17,196 20,009 Dividends: (pence per share - net) 2005 2004 Interim 44 44Proposed final 82 78 (4,911) (4,757) ------- ------- 126 122 ======= ======= ------- -------Retained profits for the financial year 12,285 15,252 ======= ======= Earnings per share 441.0p 513.2p ======= ======= NOTES:The results set out above are not full accounts as defined in s.254 of theCompanies Act 1985. The auditors have not yet made a report under s.236 of theCompanies Act 1985 on the accounts for the year ended 31st March 2005 from whichthe results are extracted and consequently full accounts for that period havenot yet been delivered to the Registrar of Companies.The basis of the calculation of earnings per share is the profit on ordinaryactivities after taxation divided by the weighted average number of ordinaryshares in issue during the year. This information is provided by RNS The company news service from the London Stock Exchange