Half Yearly Report

RNS Number : 8139B

Braemar Group PLC

03 November 2009

 

BRAEMAR GROUP PLC

HALF-YEARLY REPORT 2009

CHAIRMAN'S STATEMENT

Braemar Group plc ("Braemar" or "the Group") is pleased to announce its unaudited half-yearly report for the six months ended 30 September 2009, during which time the Group has further increased its funds under management and achieved turnover and recurring income growth.

FINANCIAL OVERVIEW

The unaudited results for the six months to 30 September 2009 report revenue of £1,439,000 (30 September 2008: £1,267,000) and a loss before tax of £109,000 (30 September 2008 £58,000 loss), which was in line with the Directors' expectations.  

Recurring income has increased to £545,000 (30 September 2008: £308,000). With the reduction in administration expenses to £862,000 (30 September 2008: £894,000), recurring income for the period covered 63% of administration expenses (30 September 2008: 34%), demonstrating significant progress in management's medium term goal of recurring income covering administration expenses in full. This can be achieved by continuing to focus on building the size of each existing fund, on which the Group earns recurring income in both divisions, and gain the benefit of economies of scale on the performance of both the Group and each fund.

Cash balances and cash equivalents at the period end were £478,000, (30 September 2008: £230,000) and the total equity of the Group stood at £2,673,000 (30 September 2008: £2,668,000).  

BUSINESS REVIEW

The business is monitored internally by the performance of the two operating divisions and the highlights for the period under review are as follows:

Braemar Securities

Braemar Securities' revenue for the period was £923,000 (30 September 2008: £633,000).  

We have further diversified our range of funds to include Ground Rents, launched during the summer, adding to the existing Agricultural Land and Student Accommodation funds. All three funds take the form of Guernsey registered Open Ended Investment Companies ("OEICs"). Our funds under management  increased by 18% during the last six months to £46m, the impact of which is reflected in the growth in recurring income.   

The OEICs are promoted to independent financial advisers by Braemar Securities and a number of independent introducers, who share in the initial commissions charged by the division. These charges and other direct marketing costs have absorbed a significant proportion of the initial commissions earned, resulting in an increase in cost of sales. The corresponding growth in funds under management will benefit the Group in the longer term due to the increase in recurring income from these funds. 

The adverse stock market conditions impacted the fundraising for Braemar UK Agricultural Land plc and the decision was taken to abort its admission to AIM. All the abort costs were absorbed by Braemar UK Agricultural Land plc.

Braemar Estates 

Braemar Estates' revenue for the period was £484,000 (30 September 2008: £595,000). 

Our property management division, which is now responsible for the management of over £300m of assets, representing some 2,800 apartments, has proved resilient during the wider property downturn, particularly as our activities are limited to the management or refurbishment of assets we own, assets in funds we manage and third party owned freeholds. The division also acts as Property Adviser to two of our three OEICs and we expect margins to improve accordingly, as the division has the capacity to grow without incurring significant additional costs. 

The fall in revenue for this division is attributable to a reduction in one-off fees earned from the Coronation residential property partnerships from finder's fees and the supervision of the development of property in the partnerships as these funds become fully invested.

Conversion of loan notes into equity

The conversion of some of the convertible loan notes reduced Braemar's debt by £200,000; enhancing net assets by the same amount and results in a saving in interest costs of approximately £20,000 over the next 18 months.

OUTLOOK

The Directors are pleased with the progress that has been made during the first half of the year. In particular, the growth in recurring income demonstrates what can be achieved from growth in funds under management while keeping costs under control. There are no immediate plans for further fund launches, the focus being on building the size of each of the existing OEICs and taking control of the management of the assets within the funds. 

The Directors look forward to reporting further improvements in the Group's performance in the second half.

Martin Robinson

Chairman

3 November 2009

  CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

FOR THE SIX MONTHS ENDED 3O SEPTEMBER 2009

		Unaudited Six months ended 30 September 2009		Unaudited Six months ended 30 September 2008		Audited Year ended 31 March 2009
	Notes	£'000		£'000		£'000
Revenue		1,439		1,267		2,610
Cost of sales		(654)		(417)		(922)
Gross profit		785		850		1,688
Decrease in fair value of investment properties		-		-		(28)
Administration expenses		(862)		(894)		(1,840)
Operating loss		(77)		(44)		(180)
Investment income		2		17		29
Finance costs		(34)		(31)		(59)
Loss before tax		(109)		(58)		(210)
Taxation		-		-		8
Loss for the period		(109)		(58)		(202)
Other comprehensive income/ (expense)
Losses on investments available for sale		-		(18)		(3)
Other comprehensive expense for the period		-		(18)		(3)
Total comprehensive expense for the period		(109)		(76)		(205)
Loss per share - basic and fully diluted	2	0.07p		0.04p		0.12p

All of the loss and the total comprehensive expense for the period are attributable to the equity holders of the parent.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 3O SEPTEMBER 2009

		Unaudited 30 September 2009		Unaudited 30 September 2008		Audited 31 March 2009
	Notes	£'000		£'000		£'000
Non-current assets
Goodwill		2,736		2,694		2,736
Other intangible assets		95		90		99
Property, plant and equipment		132		172		141
Investment properties		607		225		607
Held-to-maturity investments		59		58		59
Other financial assets		67		317		67
Available-for-sale investments		18		14		8
		3,714		3,570		3,717
Current assets
Trade and other receivables		373		462		327
Cash and cash equivalents		478		230		206
		851		692		533
Total assets		4,565		4,262		4,250
Equity and liabilities
Issued capital	4	1,721		1,638		1,638
Share premium	4	3,092		2,945		2,945
Accumulated loss		(2,140)		(1,915)		(2,038)
Total equity		2,673		2,668		2,545
Non-current liabilities
Interest bearing loans and borrowings		533		225		533
Obligations under finance leases		1		18		11
Deferred Tax		40		23		40
		574		266		584
Current liabilities
Trade and other payables		983		793		587
Interest bearing loans and borrowings		313		512		512
Obligations under finance leases		22		23		22
		1,318		1,328		1,121
Total liabilities		1,892		1,594		1,705
Total equity and liabilities		4,565		4,262		4,250

  CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 3O SEPTEMBER 2009

		Unaudited Six months ended 30 September 2009		Unaudited Six months ended 30 September 2008		Audited Year ended 31 March 2009
	Notes	£'000		£'000		£'000
Cash generated/(absorbed) by operations	3	314		247		(195)
Interest paid		(19)		(13)		(24)
Net cash inflow/(outflow) from operating activities		295		234		(219)
Cash flows from investing activities
Interest received		2		17		29
Purchase of property, plant and equipment		(4)		(7)		(21)
Purchase of intangible assets		(12)		-		(6)
Purchase of held-to-maturity investments		-		(40)		(41)
Purchase of other financial assets		-		(252)		-
Acquisition of subsidiary		-		-		(107)
Net cash used in investing activities		(14)		(282)		(146)
Cash flows from financing activities
Proceeds from borrowings		-		-		308
Repayment of borrowings		(9)		(11)		(26)
Net cash (outflow)/inflow from financing activities		(9)		(11)		282
Net increase/(reduction) in cash and cash equivalents		272		(59)		(83)
Cash and cash equivalents at 1 April		206		289		289
Cash and cash equivalents at 30 September		478		230		206

  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 3O SEPTEMBER 2009

	Ordinary Shares	Share Premium	Accumulated loss	Total equity
	£'000	£'000	£'000	£'000
Balance at 1 April 2008	1,638	2,945	(1,845)	2,738
Changes in equity for the six months ended 30 September 2008
Total comprehensive expenditure for the period	-	-	(58)	(58)
Available-for-sale investments fair value movement	-	-	(18)	(18)
Credit arising on share options	-	-	6	6
Balance at 30 September 2008	1,638	2,945	(1,915)	2,668
Changes in equity for the six months ended 31 March 2009
Total comprehensive expenditure for the period	-	-	(144)	(144)
Available-for-sale investments fair value movement	-	-	15	15
Credit arising on share options	-	-	6	6
Balance at 31 March 2009	1,638	2,945	(2,038)	2,545
Changes in equity for the six months ended 31 March 2009
Total comprehensive expenditure for the period	-	-	(109)	(109)
Credit arising on share options	-	-	7	7
Issue of share capital	83	147	-	230
Balance at 30 September 2009	1,721	3,092	(2,140)	2,673

NOTES TO THE HALF-YEARLY REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009

1 -       BASIS OF PREPARATION

The half-yearly report has been prepared in accordance with the AIM rules and the basis of accounting policies set out in the accounts for the year to 31 March 2009 and on the basis of all International Financial Reporting Standards ("IFRS") that are expected to be applicable to the Group's statutory accounts for the year ended 31 March 2010, except as disclosed below. If any amendments, new standards or new interpretations are issued these may require the financial information provided in the half-yearly report to be changed.

These financial statements are the first produced under the amended requirements of IAS 1 (Revised) "Presentation of Financial Statements" and the updated presentation has been applied to current year and comparative figures. The changes are only in presentation and disclosure and have had no impact on the reported financial results in any period. 

The Directors have chosen not to comply with IAS 34, "Interim Financial Reporting" as adopted by the EU. Accordingly, the half-yearly reports do not comply with all the disclosures in IAS 34 on interim reporting and therefore are not in full compliance with IFRS.

The amounts in the half-yearly report for the periods ended 30 September 2009 and 2008 are unaudited. The amounts in this report for the year ended 31 March 2009 are extracted from the audited statutory accounts for that period and as such are not the company's statutory accounts for that financial year. Those accounts have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.

  2 -      LOSS PER SHARE

	Unaudited Six months ended 30 September 2009		Unaudited Six months ended 30 September 2008		Audited Year ended 31 March 2009
	£'000		£'000		£'000
Loss for the period	109		58		202
Weighted average number of ordinary shares	167,635,892		163,786,903		163,786,903
Loss per ordinary share - basic	0.07p		0.04p		0.12p

There are 28,788,884 potentially issuable shares that have not been included in a diluted EPS calculation as they are anti-dilutive.

3 - RECONCILIATION OF OPERATING LOSS TO NET CASH FROM OPERATIONS

		Unaudited Six months ended 30 September 2009		Unaudited Six months ended 30 September 2008		Audited Year ended 31 March 2009
	Notes	£'000		£'000		£'000
Operating activities
Loss before tax		(109)		(58)		(210)
Depreciation of property, plant and equipment		13		19		29
Amortisation of intangible assets		16		11		28
Impairment of available-for-sale assets		-		-		21
Share option charge		7		6		12
Share based payments		30		-		-
Share based income		(9)		(29)		(29)
Loss on sale of fixed assets		-		-		9
Decrease in fair value of investment properties		-		-		28
Interest income		(2)		(17)		(29)
Interest expense		34		31		59
Operating cash flows before movements in working capital		(20)		(37)		(82)
(Increase)/decrease in trade and other receivables		(47)		1,457		1,593
Increase/(decrease) in trade and other payables		381		(1,173)		(1,706)
Cash generated from operations		314		247		(195)

4 -        ISSUE OF SHARE CAPITAL

On 8 July 2009 the Group agreed with Marc Duschenes, Chief Executive, to convert £200,000 of the convertible loan notes issued to him as part of the consideration of the acquisition of The Braemar Group Limited into equity at a price of 2.75 pence per share, which resulted in 7,272,727 new ordinary shares of 1 pence each being issued to Marc Duschenes.  

On the same day pursuant to an agreement with a supplier, who had been promoting the Company's funds, a further 1,066,750 new ordinary shares of 1 pence each were issued.

5 -       BOARD APPROVAL

The Half-Yearly Report was approved by the Board on 3 November 2009.

6 -       COPIES OF HALF-YEARLY REPORT

Copies of this report will be sent to shareholders shortly and are available to the public from the Registered Office at: Richmond House, Heath Road, Hale, Cheshire, WA14 2XP.

For further information please contact:-

Martin Robinson, Chairman, Braemar Group plc                           0161 929 4969

Marc Duschenes, Chief Executive, Braemar Group plc                 0161 929 4969

Alex Clarkson/Nick Cowles, Zeus Capital                                    0161 831 1512

Stuart Forshaw, Corporate Broking, WH Ireland Limited              0161 832 2174

 

END

 

 

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