Final Results
For release: 7am 30 September 2008
Trafalgar New Homes plc
(the "Company")
Final Results
KEY DEVELOPMENT DURING THE PERIOD:
- March 2008: New funding facility signed with Bank of Ireland.
KEY DEVELOPMENT POST PERIOD:
- July 2008: Construction started on site in Mitcham, Surrey.
CHAIRMAN'S STATEMENT:
The results for the year ended 31 March 2008 reflect the fact that the Company
had no activity during the period in terms of trading or development.
Despite this, I am pleased to report that following the successful refinancing
with Bank of Ireland in July 2008, construction work started on our development
site of 9 town houses in Heyford Road, Mitcham, Surrey. The Bank of Ireland provided
funding of up to £2.05m for the development. In addition, I loaned the Company
£335,000, entered into personal guarantees amounting to £150,000 and extended an
additional cost overrun personal guarantee of a further £150,000. This is a testament
to my belief in the value of our primary project.
Notwithstanding the difficult market conditions, we remain optimistic about the
future of the Company and are actively seeking further opportunities to enhance
shareholder value.
I would like to take this opportunity to thank the founding Directors, Ashley
Sheldrick and Kulvir Virk for their efforts and time with the Company. Ashley and
Kulvir resigned as Directors in March 2008 but remain key shareholders in the Company
and we look forward to their continued support.
We will continue to update shareholders with our progress on the Mitcham development
and with regards to any further opportunities that arise during the course of this year.
Robert McKendrick
Executive Chairman
The Directors of the issuer accept responsibility for this announcement.
For further information please contact:
Trafalgar New Homes plc 07836 722840
Andy Moore
SVS Securities plc 020 7638 5600
Ian Callaway
Peter Manfield
For further information about the Company: www.trafalgar-newhomes.co.uk
FINANCIAL RESULTS:
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2008:
2008 2007
Notes £ £
TURNOVER - -
Administrative expenses 72,573 14,857
OPERATING LOSS 3 (72,573) (14,857)
Interest payable and similar 4 6,024 1,249
charges
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (78,597) (16,106)
Tax on loss on ordinary 5 - -
activities
LOSS FOR THE FINANCIAL YEAR
AFTER TAXATION (78,597) (16,106)
Earnings per share expressed
in pence per share: 6
Basic -1.17 -0.25
Diluted -1.17 -0.25
CONTINUING OPERATIONS
None of the company's activities were acquired or discontinued during the current
year or previous year.
TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains or losses other than the losses for the current
year or previous year.
BALANCE SHEET AS AT 31 MARCH 2008:
2008 2007
Notes £ £ £ £
FIXED ASSETS
Tangible assets 7 633 844
CURRENT ASSETS
Stocks 8 1,347,486 1,241,020
Debtors 9 14,821 4,375
1,362,307 1,245,395
CREDITORS
Amounts falling due within
one year 10 1,227,681 1,032,383
NET CURRENT ASSETS 134,626 213,012
TOTAL ASSETS LESS CURRENT
LIABILITIES 135,259 213,856
CAPITAL AND RESERVES
Called up share capital 13 67,435 67,435
Share premium 14 194,393 194,393
Profit and loss account 14 (126,569) (47,972)
SHAREHOLDERS' FUNDS 19 135,259 213,856
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2008:
2008 2007
Notes £ £ £ £
Net cash outflow
from operating activities 1 (142,349) (192,100)
Returns on investments and
servicing of finance 2 (6,024) (1,249)
(148,373) (193,349)
Financing 2 127,932 188,280
Decrease in cash in the period (20,441) (5,069)
Reconciliation of net cash flow
to movement in net debt 3
Decrease
in cash in the period (20,441) (5,069)
Cash outflow/(inflow)
from decrease/(increase) in debt 233,628 (93,297)
Change in net debt resulting
from cash flows 213,187 (98,366)
Movement in net debt in the period 213,187 (98,366)
Net debt at 1 April (989,355) (890,989)
Net debt at 31 March (776,168) (989,355)
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2008:
1. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2008 2007
£ £
Operating loss (72,573) (14,857)
Depreciation charges 211 281
Increase in stocks (106,466) (158,970)
(Increase)/Decrease in debtors (10,446) 657
Increase/(Decrease) in creditors 46,925 (19,211)
Net cash outflow from operating activities (142,349) (192,100)
2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
2008 2007
£ £
Returns on investments and servicing of finance
Interest paid (6,024) (1,249)
Net cash outflow for returns on investments and (6,024) (1,249)
servicing of finance
Financing
New loans in year 725,000 93,297
Loan repayments in year (958,628) -
Amount introduced by directors 361,560 -
Amount withdrawn by directors - (8,534)
Share issue - 8,248
Share premium - 95,269
Net cash inflow from financing 127,932 188,280
3. ANALYSIS OF CHANGES IN NET DEBT
At 1.4.07 Cash flow At 31.3.08
£ £ £
Net cash:
Cash at bank and in hand - - -
Bank overdraft (30,727) (20,441) (51,168)
(30,727) (20,441) (51,168)
Debt:
Debts falling due
within one year (958,628) 233,628 (725,000)
(958,628) 233,628 (725,000)
Total (989,355) 213,187 (776,168)
NOTES TO THE FINANCIAL STATEMENTS:
1. ACCOUNTING POLICIES
Accounting convention
The financial statements have been prepared under the historicalcost convention and are
in accordance with applicable accounting standards.
Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset
over its estimated useful life.
Fixtures and fittings - 25% on reducing balance
Stocks
Work in progress is valued at the lower of cost and net realisable
value.
Deferred tax
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date.
2. STAFF COSTS
2008 2007
£ £
Wages and salaries 25,500 -
The average monthly number of employees during the year was as follows:
2008 2007
Management 4 3
3. OPERATING LOSS
The operating loss is stated after charging:
2008 2007
£ £
Depreciation - owned assets 211 281
Auditors' remuneration 2,500 2,500
Directors' emoluments 25,500 -
4. INTEREST PAYABLE AND SIMILAR CHARGES
2008 2007
£ £
Bank interest 6,024 1,249
5. TAXATION
Analysis of the tax charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31 March
2008 nor for the year ended 31 March 2007.
5. TAXATION - continued
Factors affecting the tax charge
The tax assessed for the year is higher than the standard rate of corporation tax in the UK.
The difference is explained below:
2008 2007
£ £
Loss on ordinary activities before tax (78,597) (16,106)
Loss on ordinary activities
multiplied by the standard rate of corporation tax
in the UK of 20% (2007 - 19%) (15,719) (3,060)
Effects of:
Losses carried forward 15,719 3,060
Current tax charge - -
Factors that may affect future tax charges
The company has losses carried forward of £126,000 (2007 £45,000) to set against future
taxable profits. No deferred tax asset has been recognised in respect of these losses due
to the lack of profits being achieved since incorporation.
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted
to assume the conversion of all dilutive potential ordinary shares.
Reconciliations are set out below.
2008
Weighted
average
number Per-share
Earnings of amount
£ shares pence
Basic EPS
Earnings attributable to ordinary (78,597) 6,743,519 -1.17
shareholders
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings (78,597) 6,743,519 -1.17
6. EARNINGS PER SHARE - continued
2007
Weighted
average
number Per-share
Earnings of amount
£ shares pence
Basic EPS
Earnings attributable to ordinary (16,106) 6,331,119 -0.25
shareholders
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings (16,106) 6,331,119 -0.25
As per Note 17 of the financial statements, 2,014,000 ordinary
£0.01 shares were issued after the year end. If these shares had been in issue
during the whole of the year to 31 March 2008 then the loss per share for the
period would have been 0.90p.
7. TANGIBLE FIXED ASSETS
Fixtures
and
fittings
£
COST
At 1 April 2007
and 31 March 2008 1,500
DEPRECIATION
At 1 April 2007 656
Charge for year 211
At 31 March 2008 867
NET BOOK VALUE
At 31 March 2008 633
At 31 March 2007 844
8. STOCKS
Work in progress comprises one land development which is included
at its original cost of £775,000 together with subsequent development costs.
Included within these "development costs" is interest arising on loans
specifically incurred for the land development. During the year interest of
£83,166 (2007 £72,297) was taken to work in progress. A professional valuation
was carried out by Stevens Scanlan LLP on 23 July 2007 which valued the land
at £1,100,000 based upon planning consent for nine dwellings being constructed
on the site and a maximum period of 12 months to dispose of the site. The same
valuation assessed the Gross Development Value of the site, when the scheme is
complete, to be £3,385,000. As the company already has planning permission and
taking into account subsequent development works, the directors consider the
market value of the development at 31 March 2008 to be not less than the costs
incurred to date as shown on the balance sheet.
9. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2008 2007
£ £
Other debtors 1,468 328
VAT 2,649 372
Prepayments and accrued income 10,704 3,675
14,821 4,375
10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2008 2007
£ £
Bank loans and overdrafts (see 776,168 989,355
note 11)
Trade creditors 32,205 11,009
Directors' current accounts 391,308 29,748
Accrued expenses 28,000 2,271
1,227,681 1,032,383
11. LOANS
An analysis of the maturity of loans is given below:
2008 2007
£ £
Amounts falling due within one year or on demand:
Bank overdrafts 51,168 30,727
Bank loans 725,000 958,628
776,168 989,355
The bank overdraft at the year end was subject to floating interest
rates of 3% above the banks base rate. Bank loans from the start of the year
were also subject to this interest rate, however these were renegotiated
during the year, when refinanced through the Bank of Ireland, to a rate of
1.75% above the banks base rate. The loan at 31 March 2008 is repayable upon
the earlier of 12 months from the year end or the date of disposal of the
completed units.
12. SECURED DEBTS
The following secured debts are included within creditors:
2008 2007
£ £
Bank overdrafts 51,168 30,727
Bank loans 725,000 958,628
776,168 989,355
The bank loan and overdraft are secured by a fixed and floating
charge over the assets of the company.
Subsequent to the year end , a fixed and floating charge was
created on 27 May 2008 over the assets of the company, for a sum of £325,000,
in favour of R J McKendrick a director of the company.
Subsequent to the year end , the company assigned part of the
charge due to the bank on 20 June 2008, to the names of J E Upchurch, a
director of the company, and K Virk, a former director of the company, as
security against contracts entered into on 30 April 2008 to purchase two plots
of the existing land development.
13. CALLED UP SHARE CAPITAL
Authorised:
Number: Class: Nominal 2008 2007
value: £ £
20,000,000 Ordinary £0.01 200,000 200,000
Allotted, issued and fully paid:
Number: Class: Nominal 2008 2007
value: £ £
6,743,519 Ordinary £0.01 67,435 67,435
In the 2007 financial statements 309,300 Ordinary shares of £0.01
were recorded at nil consideration. A prior year adjustment has been made to
correctly restate the issue at par value and accordingly reduce the share
premium by £3,093.
14. RESERVES
Profit
and loss Share
account premium Totals
£ £ £
At 1 April 2007 (47,972) 194,393 146,421
Deficit for the year (78,597) (78,597)
At 31 March 2008 (126,569) 194,393 67,824
15. TRANSACTIONS WITH DIRECTORS
During the year the company was recharged £54,766 (2007 £nil) by R
J McKendrick, a director of the company, for business expenditure incurred on
its behalf. R J McKendrick also personally discharged in March 2008, an
outstanding bank loan liability of the company totalling £335,000. The amount
owed to R J McKendrick at the year end was £361,560 (2007 £nil).
16. RELATED PARTY DISCLOSURES
During the year the company paid a fee of £nil (2007 £5,625) to SVS
Securities PLC, a company controlled by K Virk, a former director of the
company.
17. POST BALANCE SHEET EVENTS
On 8 April 2008 the company issued 2,014,000 ordinary £0.01 shares
at par. The shares were issued in favour of R J McKendrick, a director of the
company and the consideration of £20,140 was offset against the existing loan
due to him. Further to the issue of these shares, the company's issued share
capital was 8,757,519 Ordinary £0.01 shares.
18. ULTIMATE CONTROLLING PARTY
No individual has overall control of the company.
19. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
2008 2007
£ £
Loss for the financial year (78,597) (16,106)
Shares issued - 8,248
Share premium - 95,269
Net (reduction)/addition to shareholders' funds (78,597) 87,411
Opening shareholders' funds 213,856 126,445
Closing shareholders' funds 135,259 213,856
2008 2007
£ £ £ £
Income - -
Cost of sales
Opening work in progress 1,241,020 1,082,050
Direct costs 106,466 158,970
1,347,486 1,241,020
Closing work in progress (1,347,486) (1,241,020)
- -
GROSS PROFIT - -
Expenditure
Rent 7,200 2,151
Rates and water 233 -
Insurance 482 -
Light and heat - 64
Directors' fees 25,500 -
Telephone 2,608 761
Post and stationery 72 80
Advertising 930 4,907
Travelling 1,326 -
Site security costs 3,936 -
Sundry expenses 217 98
Ofex/Plus subscriptions 1,307 1,499
Accountancy 1,350 740
Legal and professional fees 24,203 1,192
Auditors' remuneration 2,500 2,500
Entertainment 163 -
72,027 13,992
(72,027) (13,992)
Finance costs
Bank charges 335 584
Bank interest 6,024 1,249
6,359 1,833
(78,386) (15,825)
Depreciation
Fixtures and fittings 211 281
NET LOSS (78,597) (16,106)