Final Results - Part 2
Big Yellow Group PLC
4 May 2001
PART 2
Notes to the Preliminary Announcement
1. Accounting policies
Basis of preparation
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2001 or 31 March 2000, but is
derived from those accounts. The statutory accounts for the year ended 31
March 2000 have been filed with the Registrar of Companies and those for 2001
will be filed following the company's annual general meeting. The auditors
have reported on those accounts. Their reports were unqualified and did not
contain a statement under Section 237(2) or 237(3) of the Companies Act 1985.
The financial information has been prepared in accordance with applicable
United Kingdom accounting standards. The particular accounting policies
adopted are described below.
Accounting convention
The financial information has been prepared under the historical cost
convention.
Basis of consolidation
The financial information consolidates the accounts of Big Yellow Group Plc
and all its subsidiaries at the year end using acquisition accounting
principles.
Goodwill and intangible assets
Purchased goodwill is capitalised in the year in which it arises and
amortised over 20 years. The directors regard 20 years as a reasonable
maximum for the estimated useful life of goodwill since it is difficult to
make projections exceeding this period.
Capitalised purchased goodwill in respect of subsidiaries is included within
intangible fixed assets.
Tangible fixed assets
No depreciation is provided on land and assets in the course of construction.
Interest, overhead and pre-opening launch costs are not capitalised.
Depreciation is provided on cost in equal annual instalments over the
estimated useful lives of the assets. The useful economic lives of the assets
are as follows:
Freehold property 50 years
Mezzanine flooring and staircases 25 years
Leasehold property Over period of the lease
Plant and machinery 10 years
Motor vehicles 4 years
Fixtures and fittings 5 years
Computer equipment 3 years
In the accounts for the year ended 31 March 2000 depreciation of £308,915 was
charged to administrative expenses. In the current year depreciation of
£790,882 relating to the group's stores has been charged to cost of sales. In
order to ensure consistency with this presentation, depreciation of £285,603
has been reclassified to cost of sales for the year ended 31 March 2000.
Investments
Investments held as fixed assets are stated at cost less provision for any
impairment.
Stocks
Stocks represent goods held for resale and are held at the lower of cost and
net realisable value.
Pension contributions
Pension contributions represent payments to defined contribution schemes, the
assets of which are held separately from those of the group.
Deferred taxation
Deferred taxation is provided on timing differences, arising from the
different treatment of items for accounts and taxation purposes, which are
expected to reverse in the future, calculated at rates at which it is
estimated that tax will arise.
Leases
Operating lease rentals are charged to income in equal annual amounts over
the lease term.
2. Segmental information
Turnover represents amounts derived from the provision of services which fall
within the group's ordinary activities after deduction of trade discounts and
value added tax. The group's net assets, turnover and loss before tax, all of
which arises in the United Kingdom, are attributable to one activity, the
provision of self storage and related services.
3. Information regarding directors and employees
Directors' remuneration
2001 2000
----
Salary/ Bonus Taxable Sub Pension Total Total
fees benefits total
£ £ £ £ £ £ £
Nicholas 95,000 24,000 7,014 126,014 9,500 135,514 72,329
Vetch
Philip 90,833(1) 21,500 2,227 114,560 8,500 123,060 73,016
Burks
James 80,167(1) 19,000 1,811 100,978 7,500 108,478 72,429
Gibson
Adrian 74,833(1) 17,500 1,898 94,231 7,000 101,231 -
Lee
Stephen 69,500(1) 16,500 2,107 88,107 6,500 94,607 -
Homer
David 25,000 - - 25,000 - 25,000 -
White
David 22,500 - - 22,500 - 22,500 -
Ross
Jonathan - - - - - - -
Short
Joanne - - - - - - -
Elliot
---- ---- ---- ---- ---- ---- ----
457,833 98,500 15,057 571,390 39,000 610,390 217,774
======== ======== ======= ======= ======= ======= =======
(1) Includes car allowances
Pension contributions represent amounts payable to directors' personal
pension schemes.
Directors' interests
The beneficial interests of the directors in the ordinary share capital of
the company are shown below:
Ordinary shares of 10p each At 1 At 31 At 3
April 2000 March 2001 May 2001
No. No. No.
Nicholas Vetch (including trusts) 12,500,000 12,500,000 12,500,000
Philip Burks (including trusts) 12,500,000 12,500,000 12,500,000
James Gibson 1,816,000 1,816,000 1,816,000
Adrian Lee 791,880 791,880 791,850
Stephen Homer 791,880 803,880 803,880
David White - 100,000 100,000
David Ross - 790,020 790,020
None of the directors had any direct interests in the share capital of any of
the subsidiary undertakings of the company in the year.
Share option scheme
Options in respect of ordinary shares held by the directors at 31 March 2001
under the company's share option scheme are as follows:
Name Date Option Date first Date on Number of
option price per exercisable which the ordinary
granted ordinary exercise shares
share period
expires
Nicholas 5 May 2000 100p 5 May 2003 4 May 2010 1,000,000
Vetch
Philip 5 May 2000 100p 5 May 2003 4 May 2010 1,000,000
Burks
James 24 10p 24 September 23 1,000,000
Gibson September 2001 September
1998 2008
5 May 2000 100p 5 May 2003 4 May 2010 100,000
Stephen 18 January 13.3p 18 January 17 January 375,940
Homer 1999 2002 2009
5 May 2000 100p 5 May 2003 4 May 2010 150,000
Adrian Lee 18 January 13.3p 18 January 17 January 375,940
1999 2002 2009
5 March 25p 5 March 2002 4 March 125,000
1999 2009
5 May 2000 100p 5 May 2003 4 May 2010 100,000
The company was listed on the Alternative Investment Market on 8 May 2001 at
100p per share. The market price of the company's shares at 31 March 2001 was
134p per share and the highest market price during the year was 155p per
share.
Employees 2001 2000
£ £
Wages and salaries (including directors) 1,871,761 894,824
Social security costs 212,325 69,900
Other pension costs 68,930 32,530
---- ----
2,153,016 997,254
======== ========
No. No.
The average number of employees (including directors)
employed by the group during the year:
Sales 32 16
Administration 24 10
---- ----
56 26
======== ========
4. Operating loss
2001 2000
£ £
Operating loss is stated after charging/(crediting):
Depreciation 849,558 308,915
Amortisation of goodwill 96,995 96,411
Auditors' remuneration
-- group audit fees 40,000 30,000
-- non-audit services 12,000 6,000
Operating leases -- other 932,797 323,016
Loss of income insurance claim (230,622) -
======== ========
Included in group audit fees are £10,000 (2000: £10,000) in respect of the
company.
In addition to the amounts disclosed above, the auditors received
remuneration of £120,000 in respect of the company's listing on the
Alternative Investment Market, which has been charged to the share premium
account.
5. Exceptional item
The group opened a new store at Staples Corner in March 2001 and is
transferring trading to that store from its existing store at Staples Corner.
The exceptional costs of this transfer of £300,000, being the write off of
redundant fixed assets, the cost of transferring customers' assets and lease
break costs, have been provided for as at 31 March 2001.
6. Interest payable and similar charges
2001 2000
£ £
Loan stock (see note 25) 59,326 307,808
Bank overdraft and other borrowings 31,369 147,613
Option finance fee (see note 25) 96,159 323,212
---- ----
186,854 778,633
======== ========
7. Profit of parent company
As permitted by section 230 of the Companies Act 1985, the profit and loss
account of the parent company is not presented as part of these accounts. The
consolidated loss for the financial year includes a profit of £34,408 (2000:
profit of £160,146) which is dealt with in the accounts of the parent company.
8. Taxation
No liability to corporation tax arises on the group's result for the year as
the group made a taxable loss during the year.
The group has unrelieved tax losses, which can be carried forward against
future UK trading profits, estimated at £5.0 million (2000: £4.4 million).
9. Non-equity dividends
2001 2000
£ £
7.5% preference shares (36,750) 36,750
======== ========
An accrual was made as at 31 March 2000 for a dividend of £36,750 payable on
the preference shares in issue at that date. On 8 May 2000, the preference
shares were redeemed by way of a share buy-back financed from the issue of
new ordinary shares for consideration of £1,044,110. The dividend is no
longer payable. It has therefore been credited to the profit and loss account
for the year.
Dividends have not been paid in respect of the ordinary shares of the company
in any of the periods reported upon and no dividend is proposed.
10. Loss per ordinary share
Loss per ordinary share has been calculated on the retained loss for the
financial year of £1,799,371 (2000: £2,159,454) and on the weighted average
number of shares in issue during the year of 91,794,721 (2000: 46,250,504).
There is no dilutive effect from the conversion of share options.
11. Intangible fixed assets
Goodwill
The group £
Cost
At 1 April 2000 and 31 March 2001 1,940,729
----
Amortisation
At 1 April 2000 120,255
Charge for the year 96,995
----
At 31 March 2001 217,250
----
Net book value
At 31 March 2001 1,723,479
========
At 31 March 2000 1,820,474
========
12. Tangible fixed assets
The group Freehold Short Assets Plant Motor Fixtures, Total
land lease- in the and vehic-
and hold course machi- les fittings
buildings property of nery and
develop- computer
ment equipment
Cost £ £ £ £ £ £ £
At 1 April 9,691,036 2,360,891 3,385,186 2,395,973 8,000 521,132 18,362,218
2000
Additions 9,004,351 4,510,516 9,297,847 2,952,890 62,041 424,574 26,252,219
Reclassi
fications 1,129,484 372,722(1,502,206) --- --- --- ---
---- ---- ---- ---- ---- ---- ----
At 31
March 19,824,871 7,244,129 11,180,827 5,348,863 70,041 945,706 44,614,437
2001
---- ---- ---- ---- ---- ---- ----
Accumulated
depreciation
At 1 April 143,731 52,839 --- 782,415 5,234 83,189 1,067,408
2000
Charge for 137,805 275,300 --- 276,033 9,392 151,028 849,558
the year
---- ---- ---- ---- ---- ---- ----
At 31 March 281,536 328,139 --- 1,058,448 14,626 234,217 1,916,966
2001
---- ---- ---- ---- ---- ---- ----
Net book value
At 31
March 19,543,335 6,915,990 11,180,827 4,290,415 55,415 711,489 42,697,471
2001
======= ====== ======== ====== ====== ======= ========
At 31 March 9,547,305 2,308,052 3,385,186 1,613,558 2,766 437,943 17,294,810
2000
======= ====== ======== ====== ====== ======= ========
Included within freehold property at 31 March 2000 were properties with a net
book value of £4,720,681 which were subject to the financing transaction
described in note 25. The beneficial ownership of these properties was
unaffected by this transaction.
The company Fixtures, fittings and Motor Total
computer equipment vehicles £
£ £
Cost
At 1 April 2000 173,956 - 173,956
Additions 55,280 56,861 112,141
---- ---- ----
At 31 March 2001 229,236 56,861 286,097
---- ---- ----
Accumulated depreciation
At 1 April 2000 24,904 - 24,904
Charge for the year 52,142 6,535 58,677
---- ---- ----
At 31 March 2001 77,046 6,535 83,581
---- ---- ----
Net book value
At 31 March 2001 152,190 50,326 202,516
======== ======== ========
At 31 March 2000 149,052 - 149,052
======== ======== ========
13. Investments held as fixed assets
£
Cost
At 1 April 2000 2,029,027
Additions 12,162
----
At 31 March 2001 2,041,189
========
The investments relate to the 100% ownership of the ordinary share capital of
the group's subsidiaries. The additions in the year relate to the acquisition
of The Big Yellow Holding Company Limited and Big Yellow Self Stockage
Company SAS. Details of the group's principal subsidiaries are shown below:
.Big Yellow Self Storage Company Limited is registered in England and Wales
and provides self storage services to private individuals and businesses.
The Big Yellow Property Company Limited is registered in England and Wales
and its principal activity is property management and ownership.
The Big Yellow Construction Company Limited is registered in England and
Wales and its principal activity is property construction.
The Big Yellow Holding Company Limited is registered in England and Wales and
its principal activity is acting as an intermediate holding company.
Big Yellow Self Stockage Company SAS is registered in France. It had not
commenced trading at the year end.
14. Debtors
Group Company Group Company
2001 2001 2000 2000
£ £ £ £
Trade debtors 122,557 - 88,669 -
Amounts owed by group - 43,210,071 - 11,385,201
undertakings
Other debtors 1,368,974 86,949 574,044 46,029
Prepayments and accrued 966,909 35,469 433,696 43,603
income
---- ---- ---- ----
2,458,440 43,332,489 1,096,409 11,474,833
======== ======== ======== ========
15. Creditors: amounts falling due within one year
Group Company Group Company
2001 2001 2000 2000
£ £ £ £
Bank loans - - 2,116,000 -
Trade creditors 2,307,679 30,382 1,109,760 94,748
Taxation and social security 59,026 35,558 12,721 161,833
Other creditors 413,124 - 4,927,518 -
Accruals and deferred income 3,414,032 290,989 1,581,761 327,570
Dividends payable - - 36,750 36,750
---- ---- ---- ----
6,193,861 356,929 9,784,510 620,901
======== ======== ======== ========
Included within the group's other creditors is £nil (2000: £4,731,800)
arising from the financing transaction described in note 25.
16. Creditors: amount falling due after more than one year
Group Company Group Company
2001 2001 2000 2000
£ £ £ £
Loan stock (see note 25) - - 4,000,000 4,000,000
======== ======== ======== ========
The loan stock represented convertible unsecured loan stock which was
repayable on 21 September 2009. The loan stock was redeemed on 8 May 2000.
Interest was payable on the loan stock at the rate of 71/2%.
17. Financial instruments
The group's only financial instruments as at 31 March 2001 are cash, trade
debtors and trade creditors, which arise directly from its operations.
The group does not trade in financial instruments. All monetary assets and
liabilities are denominated in sterling and the group therefore has no
exposure to currency risk.
Short term debtors and creditors have been omitted from all disclosures
below. Details of non-equity shares are given in note 19.
Maturity profile of financial liabilities
2001 2000
---- ----
Bank Loan Other Bank Loan Other
borrowings stock borrowings stock
£ £ £ £ £ £
Within - - - 2,116,000 - 4,731,800
one year
or less
or on
demand
More than - - - - 4,000,000 -
five years
---- ---- ---- ---- ---- ----
Gross - - - 2,116,000 4,000,000 4,731,800
financial
liabilities
======== ======== ======== ======== ======== ========
The group had the following undrawn borrowing facilities at 31 March 2001.
2001 2000
£ £
Expiring in one year or less - 884,000
---- ----
Total - 884,000
======== ========
Interest rate profile
Total Floating Fixed rate Weighted Weighted Weighted
rate financial average average average
financial liabilities fixed period period
liabilities interest for until
rate which maturity
the
rate is
fixed
£ £ £
At 31
March 2001
Gross - - - - - -
financial
liabilities
---- ---- ---- ---- ---- ----
At 31
March 2000
Gross 10,847,800 2,116,000 8,731,800 11.7% 4.9 years 3.9 years
financial
liabilities
---- ---- ---- ---- ---- ----
Total Floating rate financial assets
£ £
At 31 March 2000
Gross financial assets 4,528,840 4,528,840
---- ----
At 31 March 2001
Gross financial assets 10,967,581 10,967,581
---- ----
The interest rate on floating rate assets and liabilities is linked to London
Inter Bank Offer Rates.
Fair values of financial assets and liabilities
2001 2000
---- ----
Primary Carrying Estimated Carrying Estimated
financial amount fair value amount fair value
instruments £ £ £ £
held or issued
to finance the
group's
operations
Cash at bank, 10,967,581 10,967,581 4,528,840 4,528,840
in hand and
other liquid
investments
======== ======== ======== ========
2001 2000
---- ----
Primary Carrying Estimated Carrying amount Estimated
financial amount fair value £ fair value
instruments £ £ £
held or
issued to
finance the
group's
operations
Bank - - 2,116,000 2,116,000
borrowings
Loan stock - - 4,000,000 4,000,000
Other - - 4,731,800 4,731,800
---- ---- ---- ----
Gross - - 10,847,800 10,847,800
financial
liabilities
---- ---- ---- ----
7% - - 1,000,000 1,000,000
convertible
preference
shares
---- ---- ---- ----
The fair values have been calculated by discounting expected cash flows at
prevailing interest rates at the year end.
18. Provisions for liabilities and charges
Deferred taxation
The group
The amounts not provided in the accounts are:
Not provided Not provided
2001 2000
£ £
Capital allowances in advance of depreciation 4,113 38,325
Short term timing differences (103,575) (6,030)
Less trading losses carried forward (1,478,277) (1,328,674)
---- ----
(1,577,739) (1,296,379)
======== ========
The company
The amounts not provided in the accounts are:
Not provided Not provided
2001 2000
£ £
Capital allowances in advance of depreciation 2,550 6,208
Short term timing differences (13,586) -
Less trading losses carried forward (12,086) (12,086)
---- ----
(23,122) (5,878)
======== ========
19. Called up share capital
2001 2000
£ £
Authorised:
Nil (2000: 31,021,160) ordinary 'A' shares of 10p --- 3,102,116
each
Nil (2000: 28,028,800) ordinary 'B' shares of 10p --- 2,802,880
each
Nil (2000: 1,000,000) preference shares of 10p each --- 100,000
150,000,000 (2000: nil) ordinary shares of 10p each 15,000,000 ---
---- ----
15,000,000 6,004,996
======== ========
Called up, allotted and fully paid:
Nil (2000: 28,399,760) ordinary 'A' shares of 10p --- 2,839,976
each
Nil (2000: 23,028,800) ordinary 'B' shares of 10p --- 2,302,880
each
Nil (2000: 1,000,000) preference shares of 10p each --- 100,000
96,485,590 (2000: nil) ordinary shares of 10p each 9,648,559 ---
---- ----
9,648,559 5,242,856
======== ========
By special resolution dated 17 April 2000 the authorised and issued 'A' and
'B' shares and the preference shares were converted into ordinary shares on 8
May 2000. By the same resolution the authorised share capital of the company
was increased to £15,000,000 by the creation of 8,995,004 ordinary shares.
Movements in the company's issued share capital during the year were as
follows:
No. £
At 1 April 2000
'A' ordinary shares of 10p each 28,399,760 2,839,976
'B' ordinary shares of 10p each 23,028,800 2,302,880
Preference shares of 10p each 1,000,000 100,000
---- ----
52,428,560 5,242,856
On 8 May 2000
Repurchase of preference shares (1,000,000) (100,000)
Conversion of authorised and issued share capital 52,428,560 5,242,856
into ordinary shares of 10p each
Issue of 45,057,030 ordinary shares of 10p each 45,057,030 4,505,703
---- ----
At 31 March 2001 96,485,590 9,648,559
======== ========
Details of directors' share options are given in note 3. At 31 March 2001
there were a further 543,625 (2000: 68,000) options in issue to members of
the group's staff.
51,400 options with an exercise price of 62.5 pence per share were granted on
16 November 1999. These options are exercisable from 16 November 2002.
134,475 options with an exercise price of 100 pence per share were issued on
5 May 2000. These options are exercisable from 5 May 2003.
357,750 options with an exercise price of 137.5 pence per share were issued
on 30 November 2000. These options are exercisable from 30 November 2003.
20. Statement of movements on reserves
The group Share premium account Profit and loss account
£ £
Balance at 1 April 2000 7,924,821 (2,179,940)
Shares issued (net of 39,097,300 ---
expenses)
Loss retained for year --- (1,799,371)
Redemption of preference (900,000) (44,110)
shares
---- ----
Balance at 31 March 2001 46,122,121 (4,023,421)
======== ========
The company
Balance at 1 April 2000 7,924,821 83,648
Shares issued (net of 39,097,300 ---
expenses)
Profit retained for the --- 71,158
year
Redemption of preference (900,000) (44,110)
shares
---- ----
Balance at 31 March 2001 46,122,121 110,696
======== ========
21. Financial commitments
The group has operating lease commitments payable within the next year,
expiring as follows:
Group Land Company Land Group Land Company Land
and buildings and buildings and buildings and buildings
2001 2001 2000 2000
£ £ £ £
Within one 27,656 27,656 --- ---
year
Within two 25,500 25,500 53,156 53,156
to five
years
After five 1,678,650 --- 836,888 ---
years
---- ---- ---- ----
1,731,806 53,156 890,044 53,156
======== ======== ======== ========
22. Capital commitments
Group Company Group Company
2001 2001 2000 2000
£ £ £ £
Amounts contracted but not 6,787,300 --- 1,618,304 ---
provided in respect of
freehold properties
======== ======== ======== ========
23. Reconciliation of operating profit to net cash flow from operating
activities
2001 2000
£ £
Operating loss (2,908,951) (1,648,884)
Depreciation 849,558 308,915
Amortisation of goodwill 96,995 96,411
Increase in stock (62,435) (29,581)
Increase in debtors (1,359,529) (643,585)
Increase in creditors 3,175,456 1,147,561
---- ----
Net cash outflow from operating activities (208,906) (769,163)
======== ========
24.(a) Analysis of cash flows for headings netted in the cash flow
statement
2001 2001 2000 2000
£ £ £ £
Returns on
investments and
servicing of finance
Interest received 1,257,182 259,239
Interest paid (662,549) (302,938)
---- ----
594,633 (43,699)
======== ========
Capital expenditure
and financial
investment
Purchase of (25,658,079) (12,038,414)
tangible fixed
assets
======== ========
Acquisitions and
disposals
Purchase of - (28,024)
subsidiary
undertaking
======== ========
Financing
Issue of ordinary 43,603,003 7,767,677
share capital (net
of expenses)
Repurchase of (1,044,110) -
preference shares
Debt due within a
year:
Loans repaid (2,116,000) (509,000)
(Repayment)/proceeds (4,731,800) 4,731,800
of financing
transaction
Reclassification of - 2,625,000
debt
---- ----
(6,847,800) 6,847,800
Debt due beyond a
year:
Loans repaid (4,000,000) -
New loans acquired - 4,000,000
Reclassification of - (2,625,000)
debt
---- ----
(4,000,000) 1,375,000
---- ----
Net cash inflow 31,711,093 15,990,477
from financing
======== ========
24. (b) Analysis of net debt
At Cash At
31 March flow 31 March
2000 £ 2001
£ £
Cash at bank and in hand 4,528,840 6,438,741 10,967,581
Debt due after one year (4,000,000) 4,000,000 -
Debt due within one year (6,847,800) 6,847,800 -
----
10,847,800
---- ---- ----
Total (6,318,960) 17,286,541 10,967,581
======== ======== ========
25. Related party transactions
During the year ended 31 March 2000 the group entered into a financing
transaction in respect of two of its properties with TR Property Investment
Trust PLC ('TRPIT'), one of the company's shareholders. The group sold the
properties to TRPIT for £4,731,800, but retained an option to repurchase the
properties and retained the beneficial ownership of these properties. The
group repurchased these properties on 26 June 2000 for consideration of
£5,364,829. The profit and loss account for the year includes within interest
payable and similar charges a charge of £96,159 (2000: £323,212) in respect
of the option finance fee.
During the year ended 31 March 2000 the company issued loan stock to
Prudential Insurance Company of America, one of the company's shareholders.
The terms of this loan stock are shown in note 16 and the charge for the
total return for the year in respect of the loan stock is shown in note 6.
The loan stock was redeemed on 8 May 2000.
26. Post balance sheet events
Subsequent to the year end, the directors announced their intention to raise
finance by way of a Placing and Open Offer to raise £22.8 million net of
expenses. More details of this transaction are given in the Chairman's
statement and operating and financial review. The table below shows the
effect of this transaction on the group's balance sheet.
Balance sheet as Net proceeds of Pro-forma balance
at the proposed sheet as at
31 March 2001 placing and open 31 March 2001
£ offer £
£
Fixed assets 44,420,950 - 44,420,950
Current assets 13,520,170 22,794,730 36,314,900
Creditors: (6,193,861) - (6,193,861)
amounts falling
due within one
year
---- ---- ----
Total net assets 51,747,259 22,794,730 74,541,989
======== ======== ========
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