Interim Results

RNS Number : 6161E

Medsea Estates Group PLC

30 September 2008

 



Medsea Estates Group PLC

INTERIM RESULTS to 30th June 2008

Chairman's Statement

Pre-tax profits for the period were £25,000 compared to £111,000 for the same period last year.

Revenue in the period declined by 28.7% from £5,921,000 to £4, 216,000 whilst gross margins improved slightly from 25.8% to 28.8%.

Administrative overheads have been reduced by 14.5%, but the ongoing level of reduction should be higher than this because the first half of the year included severance costs and these economies were made during the period rather than at the start.

Trading is, of course, very depressed, the result of current adverse market conditions. The reduction in staff and offices mirrors the steps taken by our competitors - some of whom have now ceased trading. However, the group maintains its minority interests in several developments and I anticipate that these will still bear fruit towards the end of 2009 and into 2010 - it is not until that time that we shall recognise our profits from these activities in our accounts.

Trading since 30 June 2008 has continued at a much reduced level.

Our key objective at this time is to trade on a basis that enables us to at least break-even, so that we can capitalise on our position in the market place when there is an up-turn in sentiment.

In the meantime I would like to thank all our staff and associates for their considerable fortitude in such difficult circumstances.

The Company announced on 8 September 2008 that it had resolved to seek shareholder approval for the cancellation of admission to trading on AIM of the Ordinary shares in the Company (the 'Delisting'). The circular to shareholders convening the general meeting to consider the Delisting resolution is expected to be posted shortly.

Tony Gatehouse

Chairman

  MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

UNAUDITED CONSOLIDATED INTERIM INCOME STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2008

		Unaudited 6 months 30 Jun		Unaudited 6 months 30 Jun		Audited 12 months 31 Dec
		2008		2007		2007
	Notes	£'000		£ 000		£'000
Revenue	2	4,216		5,921		10,537
Cost of sales		(3,004)		(4,394)		(8,274)
Other income		31		-		-
Administrative expenses		(1,201)		(1,406)		(3,556)
Finance income		2		4		24
Finance expense		(19)		(14)		(28)
Profit/(loss) before taxation		25		111		(1,297)
Tax charge on profit/(loss)		(19)		(15)		(14)
Profit/(loss) for the period		6		96		(1,311)
Attributable to: Equity holders of the parent		6		96		(1,307)
Minority interests		-		-		(4)
		6		96		(1,311)
Earnings/(loss) pence per share Basic and diluted	12	0.01		0.13		(1.76)

None of the group's activities was acquired or discontinued during the above periods.

MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

UNAUDITED CONSOLIDATED INTERIM BALANCE SHEET

AS AT 30 JUNE 2008

		Unaudited 6 months		Unaudited 6 months		Audited 12 months
	Notes	30 Jun 2008		30 Jun 2007		31 Dec 2007
		£'000		£'000		£'000
ASSETS Non-current assets Other intangible assets	4	3		6		4
Property, plant and equipment	5	1,056		962		1,057
Investments in associates		694		225		646
Other financial assets	6	100 _		92		100
		1,853		1,285		1,807
Current assets Inventories		178		192		165
Trade and other receivables	7	1,717		2,091		1,788
Current tax recoverable	8	-		47		15
Cash and cash equivalents		121		1,672		317
		2,016		4,002		2,285
Total assets		3,869		5,287		4,092
EQUITY AND LIABILITIES Shareholders' equity Share capital	11	7,798		7,798		7,798
Share premium		22		22		22
Other reserve		137		117		128
Revaluation reserve		54		46		51
Merger reserve		(7,058)		(7,058)		(7,058)
Foreign currency translation reserve		(165)		-		(170)
Retained earnings		(472)		830		(475)
		316		1,755		296
Non-current liabilities Long-term borrowings	9	202		249		209
Deferred tax	10	-		3		-
		202		252		209
Current liabilities Trade and other payables	8	2,708		3,143		3,065
Short-term borrowings	8	634		137		522
Corporation tax	8	9		-		-
		3,351		3,280		3,587
Total equity and liabilities		3,869		5,287		4,092

The interim financial information was approved at a meeting of the board held on 29 September 2008 and signed on its behalf by

G Jeffs

Director

MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

UNAUDITED CONSOLIDATED INTERIM BALANCE SHEET

FOR THE SIX MONTHS TO 30 JUNE 2008

	Share capital	Share premium	Other reserves	Revaulation reserve	Merger reserve	Foreign currency translation reserve	Retained earnings	Minority interests	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2007 brought forward	7,063	22	117	46	(7,058)	(109)	778	4	863
Loss for the period	-	-	-	-	-	-	(1,307)	-	(1,307)
Exchange differences arising on translation of foreign operations	-	-	11	5	-	(61)	54	-	9
Minority interest	-	-	-	-	-	-	-	(4)	(4)
Sales of revalued properties	-	-	-	-	-	-	-	-	-
Total recognised income and expense for the year	-	-	11	5	-	(61)	(1,253)	(4)	(1,302)
Issue of shares	735	-	-	-	-	-	-	-	735
Balance at 31 December 2007 carried forward	7,798	22	128	51	(7,058)	(170)	(475)	-	296
Balance at 1 January 2008 brought forward	7,798	22	128	51	(7,058)	(170)	(475)	-	296
Profit for the period	-	-	-	-	-	-	6	-	6
Exchange differences arising on translation of foreign operations	-	-	9	3	-	5	(3)	-	14
Total recognised income and expense for the period	-	-	9	3	-	5	3	-	20
Balance at 30 June 2008 carried forward	7,798	22	137	54	(7,058)	(165)	(472)	-	316

MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS TO 30 JUNE 2008

	Unaudited 6 months 30 Jun	Unaudited 6 months 30 Jun	Audited 12 months 31 Dec
	2008	2007	2007
	£'000	£'000	£000
Cash flows from operating activities Profit/(loss) before tax	25	111	(1,297)
Adjustments for: Depreciation	70	61	127
Foreign exchange	(73)	(42)	(63)
Finance income	(2)	(4)	(24)
Finance expense	19	14	28
Amortisation of other intangible assets	1	-	2
(Profit)/loss on sale of tangible assets	15	-	15
(Profit) on sale of other financial assets	(31)	-	-
(Increase)/decrease in trade and other receivables	71	134	548
(Increase)/decrease in inventories	(13)	109	136
Increase/(decrease) in trade and other payables	(354)	82	47
Cash generated from operations	(272)	465	(481)
Tax on profits paid	5	(135)	(137)
Interest paid	(19)	(14)	(28)
Net cash from operating activities	(286)	316	(646)
Cash from investing activities Interest received	2	4	24
Purchase of property, plant and equipment	(7)	(153)	(256)
Proceeds from the sale of other financial assets	39	-	-
Payments to acquire shares in associates	-	-	(654)
Payments to acquire other intangible assets	-	-	(1)
Net cash generated used in investing activities	34	(149)	(887)
Cash from financing activities Repayment of borrowings	(16)	(145)	123
Share issues	-	735	735
Other loans	-	(13)	(13)
Capital element of finance lease payments	(15)	(16)	(27)
Net cash generated from financing activities	(31)	561	818
Net (decrease)/increase in cash and cash equivalents	(283)	728	(715)
Cash and cash equivalents at the beginning of the period	229	944	944
Cash and cash equivalents at the end of the period	(54)	1,672	229
Cash and cash equivalents consists of: Cash and cash equivalents included in current assets	121	1,672	317
Bank overdraft included in current liabilities	(175)	-	(88)
	54	1,672	229

MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS TO 30 JUNE 2008

1 Principal accounting policies

Basis of preparation

Medsea Estates Group PLC prepares its annual report and accounts on the basis of International Financial Reporting Standards (IFRS) as adopted for use by the European Union (EU). The financial information presented herein has been prepared in accordance with the accounting policies expected to be used in preparing the Medsea Estates Group PLC annual report and accounts for the year ended 31 December 2008, which do not differ significantly from those used for the Medsea Estates Group PLC annual report and accounts for the year ended 31 December 2007.

The financial information shown in this half year review is unaudited and does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.

The financial statements for the year ended 31 December 2007, which were prepared under IFRS, have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under Section 237 (2) or (3) of the Companies Act 1985.

2 Revenue

Revenue derives wholly from the principal activity of the Group which is carried out in countries adjacent to the Mediterranean. Revenue is the total amount receivable by the group for goods supplied and services provided, excluding value added tax.

Commission income receivable in respect of property sales is recognised at the point at which a legally binding contract for sale has been signed between the purchaser and the developer. In addition, the terms of the contracts with the developers has to have been fulfilled in terms of commissions being invoicable to them. Commissions payable in respect of property sales are recognised at the same time as the corresponding commission income is recognised, and are not payable until after commissions income is received.

3 Going concern

The group has advanced sums to a developer in Calabria and this has been offset in these accounts against other amounts owed by the group to the same developer. The group has been heavily involved in the marketing and promotion of the properties being constructed by that developer and accordingly their ability to make the commission payments as they fall due is a significant issue. The net sum due to the group is £113,269 which is included in trade debtors.

The group is also dependent upon future commission income from introductions made to developers. This future commission income will be significantly affected by the slow down in the European property market and the availability of credit to enable purchasers to complete transactions that have already been entered into. After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

  MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS TO 30 JUNE 2008

4	Intangible assets
												Trademarks
												£'000
	Cost
	At 1 January 2008											14
	Foreign exchange difference											2
	At 30 June 2008											16
	Amortisation
	At 1 January 2008											10
	Provided during the year											1
	Foreign exchange difference											2
	At 30 June 2008											13
	Net book values
	At 30 June 2008											3
	At 31 December 2007											4

5	Tangible fixed assets
				Freehold		Investment		Office		Total
				land and		properties		Equipment and
				buildings				motor vehicles
				£'000		£'000		£'000		£'000
	Cost or valuation
	At 1 January 2008			275		341		953		1,569
	Additions			-		-		7		7
	Disposals			-		-		(70)		(70)
	Foreign exchange difference			20		25		70		115
	At 30 June 2008			295		366		960		1,621
	Depreciation
	At 1 January 2008			36		-		476		512
	Charge for year			3		-		67		70
	Disposals			-		-		(58)		(58)
	Foreign exchange difference			2		-		39		41
	At 30 June 2008			41		-		524		565
	Net book value
	At 30 June 2008			254		366		436		1,056
	At 31 December 2007			239		341		477		1,057

  MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS TO 30 JUNE 2008

6

Other financial assets

Available for sale investments

£'000

Fair value

At 1 January 2008

100

Disposal

(8)

Foreign exchange difference

8

At 30 June 2008

100

Amounts written off

At 1 January 2008

-

At 30 June 2008

-

Net book value

At 30 June 2008

100

At 31 December 2007

100

7	Trade and other receivables
								Unaudited		Unaudited		Audited
								30 Jun		30 Jun		31 Dec
								2008		2007		2007
								£'000		£'000		£'000
	Trade debtors							365		461		354
	Other debtors							1,350		1,604		1,209
	Prepayments and accrued income							2		26		225
								1,717		2,091		1,788

8	Trade and other payables
								Unaudited		Unaudited		Audited
								30 Jun		30 Jun		31 Dec
								2008		2007		2007
								£'000		£'000		£'000
	Bank overdraft and loan							634		137		522
	Trade payables							1,957		1,324		1,072
	Other taxation and social security							225		288		289
	Other payables							136		1,481		1,521
	Accruals and deferred income							363		20		153
	Obligations under finance lease							27		30		30
								3,342		3,280		3,587
	Corporation tax payable							9		-		-
								3,351		3,280		3,587

  MEDSEA ESTATES GROUP PLC AND SUBSIDIARY UNDERTAKINGS

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS TO 30 JUNE 2008

9	Long term borrowings
								Unaudited		Unaudited		Audited
								30 Jun		30 Jun		31 Dec
								2008		2007		2007
								£'000		£'000		£'000
	Obligations under finance lease							7		30		19
	Bank loan							195		219		190
								202		249		209

10	Provisions for liabilities and charges
								Unaudited		Unaudited		Audited
								30 Jun		30 Jun		31 Dec
								2008		2007		2007
								£'000		£'000		£'000
	Deferred tax:
	At start of period							(17)		91		91
	Foreign exchange difference							-		-		(9)
	Charge/(credit) for the period							-		(88)		(99)
	At end of period							(17)		3		(17)
	The deferred tax balance arises in respect of losses in the UK which are expected to be available to set against future profits. The balance is included in other debtors.

11

Share Capital

Unaudited

Unaudited

Audited

30 Jun

30 Jun

31 Dec

2008

2007

2007

£'000

£'000

£'000

Authorised

Equity shares

100,000,000 Ordinary shares of 10 pence each

10,000

10,000

10,000

Allotted

Equity shares

77,979,412 Allotted, called up and fully paid ordinary

shares of 10 pence each

7,798

7,798

7,798

12

Earnings per share

The calculation of the earnings per share is based on the profit attributable to the equity holders for the period of £7,000 and on 77,979,412 shares in issue during the period.

During 2007, Medsea Estates Group PLC issued 7,350,000 ordinary shares of 10p each at 10p and issued share warrants for 1,559,588 ordinary shares of 10p each in the company. The share warrants were not included in the calculation of diluted EPS as the average share price for the period was less than the exercise price.

 

END

 

 

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