Final Results

YJL PLC 14 December 2000 YJL plc Preliminary Results YJL plc, the construction and property development group, announces preliminary results for the year ended 30 September 2000. SUMMARY * Profit before tax £2.0m (1999: £8.5m, including £6.8m of profits on disposals of discontinued businesses). * Operating profit on continuing operations of £3.6m before exceptional items (1999: £0.9m) * Net assets per share 32.2p (1999: 26.8p) * Year end net cash balance of £9.1m (1999: £2.1m) Commenting on the results, Cedric Scroggs, Chairman of YJL plc, said: Prospects for the existing businesses are satisfactory, with a forward order-book in the Construction Division today of £195m, (1999 £144m). It is your Board's intention to use its growing financial capacity to secure attractive growth in sectors for which the Group already has, or can readily acquire, a competitive expertise. Enquiries: Paul Sellars, Finance Director, YJL plc Tel: 020 8982 4321 Chairman's Statement Results for 1999/2000 Since the Interim Statement in May, it is most pleasing to report that your Group has continued to make progress, and many years of financial problems and excess debt are now clearly in the past. At the time of the acquisition of the Britannia Group in April, the last of the outstanding bank loans, arising from the re-structuring in 1993, were repaid, and YJL has now returned to normal banking relationships. The whole management team deserves credit for bringing to a successful close a decade of serious financial difficulties for the Group. This recovery is best evidenced by the year-end net cash balance of £9.1m (1999 £2.1million). The overall result for the year was a profit before tax of £2.0m from turnover of £202m. (1999 profit of £8.5m from sales of £248m). This headline figure should not disguise the solid progress made in Continuing Operations, principally construction activities, from which operating profits increased to £3.6m from £0.9m, stripping out the exceptional items arising from acquisitions, disposals, and associated re-structuring costs. The Construction Division, enlarged by acquisitions, traded successfully in the year, with a general improvement in margins despite the continued fierce competitiveness of many of its markets. In the Property Division, two notable sales were the 200 acre site at Manor Farm, Ruislip and 20 acres of residential land at Sovereign Harbour, Eastbourne. Details of the various Continuing Operations are given in the Business Review section of this report. The Board Certain changes to the Group Board were reported in my last annual statement. Since then, your very small Board has comprised the two Executive Directors, Roger Feast Chief Executive of the Construction Division and Paul Sellars, Chief Executive of the Property Division in addition to his role of Group Finance Director. The executive team is supported by myself and by Peter Gyllenhammar, Deputy Chairman, who provides invaluable advice on matters of strategy and business development. It is the intention of your Board to appoint a third non-executive director in 2001. Business development As previously reported, in April 2000 there was an agreed cash bid for Britannia Group plc, a listed construction, building materials and property group. The £13.3m cost of this transaction was largely offset by cash of £ 3.7m within the acquired businesses, and by the receipt of £8.5m in July from the disposal of Birchwood Concrete Products, a Britannia subsidiary, to Hanson plc. The construction activities of the Britannia Group now form part of the YJL Construction Division and the necessary integration has been successfully completed. During the year two further smaller and specialised construction companies were also acquired, namely Lodge & Sons, well-known for its work in the restoration of churches and listed buildings, and Hatchpaines Construction, a specialist in the fitting-out of restaurants and bars. Both businesses are expected to contribute satisfactorily to Group results in 2000/ 2001. Lovell America has continued its disposal programme during the year with £7.6m of funds being repaid to the U.K. Shareholders At the last Annual General Meeting your Board was authorised to acquire just under 15% of the Group's share capital. An approach was made to several banks, whose YJL shareholdings arose from the debt for equity swap in 1993. I am pleased to report that to date 6.44% of the Group's shares have been purchased and cancelled. Your Board believes that it is in the best interests of shareholders for this process to continue, when shares can be purchased at a significant discount to underlying net asset value. Accordingly, the approval of shareholders will be sought at an EGM, to follow the AGM, to extend the share buy-back programme in 2001 to just under 15% of those shares in issue at the date of the EGM. Further details of the proposed share buy-back programme will be given to shareholders in a circular that will accompany the annual report and accounts. Dividend Your Board is not recommending the payment of a dividend in respect of 1999/ 2000, in conformity with its view that the Group's financial resources, for the time being, are best devoted to the development of a sound and enlarged base of future earnings, and that this policy will, in due course, create better long-term shareholder value. Employees This has been an important year for YJL, with substantial changes including many new colleagues becoming employees of the Group. Their efforts, loyalty, and contribution to the business are much appreciated, and on behalf of your Board, I extend sincere thanks to them all. Strategy and future prospects This report demonstrates that good progress is being made towards your Board's two key objectives of eliminating excess debt, and of developing the construction-related businesses in sectors offering higher margins. Much thought has been given to the appropriate longer-term strategy, and an active business development unit continually assesses further investment opportunities. It is your Board's intention to use its growing financial capacity to secure attractive growth in sectors for which the Group already has, or can readily acquire, a competitive expertise. Prospects for the existing businesses are satisfactory, with a forward order-book in the Construction Division today of £195m, (1999: £144m), and worthwhile business under negotiation in the Property Division. I look forward with some confidence to my next report to shareholders. YJL PLC GROUP PROFIT AND LOSS ACCOUNT Before Exceptional Total Total exceptional Items items 2000 2000 1999 2000 (Note 2) For the year ended 30 £000 £000 £000 £000 September Notes Turnover: Group and share of 202,089 - 202,089 248,021 joint ventures' turnover Less: share of joint ventures' (6,840) - (6,840) (4,291) turnover Continuing operations 170,000 - 170,000 167,323 Acquisitions 21,819 - 21,819 - Discontinued operations 3,430 - 3,430 76,407 Group Turnover 1 195,249 - 195,249 243,730 Cost of sales (176,637) - (176,637) (224,989) Gross profit 18,612 - 18,612 18,741 Administrative expenses (15,310) (1,775) (17,085) (16,101) Income from joint ventures 313 - 313 100 Other operating income 466 - 466 10 Continuing operations 3,302 (1,093) 2,209 861 Acquisitions 333 (682) (349) - Discontinued operations 446 - 446 1,889 Operating profit 4,081 (1,775) 2,306 2,750 Profit on sale of properties - 485 485 55 (Loss)/profit on disposal of - (414) (414) 6,816 discontinued operations Profit on ordinary activities 4,081 (1,704) 2,377 9,621 before interest 740 - 740 693 Interest receivable (231) (855) (1,086) (1,796) Interest payable and similar charges Profit on ordinary activities 4,590 (2,559) 2,031 8,518 before taxation 3 (563) - Taxation on ordinary activities Profit for the year 1,468 8,518 Basic and Diluted earnings per 4 1.9p 11.1p Ordinary share Statement of group total recognised gains and losses 2000 1999 £000 £000 Profit for the year 1,468 8,518 Currency translation differences on foreign currency net 2,000 767 investments Total recognised gains and losses relating to the year 3,468 9,285 The realisation in the year of property revaluation gains of previous years amounted to £229,000 (1999: £539,000). There are no other material differences between the profit as reported and on an unmodified historical cost basis. YJL PLC GROUP BALANCE SHEET At 30 September 2000 2000 1999 1999 £000 £000 £000 £000 Fixed Assets Intangible assets 770 - Tangible assets 7,810 3,496 Investments 1,006 - Investments in joint ventures: Loans to joint ventures 9,194 10,868 Share of gross assets 21,045 24,468 Share of gross (14,866) (19,073) liabilities 15,373 16,263 24,959 19,759 Current assets Stocks and work in progress 14,084 20,029 Debtors: Due within one year 37,051 27,016 Due after more than 2,480 3,810 one year Cash at bank and in hand 15,829 10,014 69,444 60,869 Creditors: amounts falling due within one year 70,491 48,310 Net Current Assets (1,047) 12,559 Total assets less current liabilities 23,912 32,318 Creditors: amounts falling due after more than one year Long term debt 531 4,943 Other creditors 272 6,827 803 11,770 Net Assets 23,109 20,548 Shareholders' funds Share capital 7,167 7,660 Share premium account 1,065 1,066 Revaluation reserve 1,119 1,348 Capital Reserve 768 314 Profit and loss account 12,990 10,160 Equity shareholders' funds 23,109 20,548 YJL PLC CASH FLOW Group statement of cash flow For the year ended 30 September 2000 2000 1999 £000 £000 Net cash inflow/(outflow) from operating activities 9,115 (1,693) Returns on investment and servicing of finance Interest received 740 690 Interest paid (1,086) (1,311) Taxation (346) (621) Corporation tax paid - - Capital expenditure Payments to acquire tangible fixed assets (1,550) (228) Proceeds on sale of tangible fixed assets 2,060 1,200 Acquisitions of own shares (868) - Investments in and movements on loans to joint 2,768 (1,550) ventures 2,410 (578) Acquisitions and disposals Receipts from sale of subsidiary undertakings - 19,816 Costs incurred on sale of subsidiary undertakings - (534) Cash disposed of with subsidiary undertakings - (9) Payments to acquire subsidiary undertakings (14,048) - Payments to acquire joint ventures - (2) Cash acquired on acquisition of subsidiaries 3,771 - Cash acquired with joint ventures - 102 Receipt from sale of business 8,970 - (1,307) 19,373 Cash inflow before use of liquid resources and 9,872 16,481 financing Management of liquid resources Purchase of liquid resources (6,000) (116) Financing Movement in short term borrowings - (6,069) Movement in long term borrowings (5,107) (4,529) (5,107) (10,598) (Decrease)/Increase in cash during the year (1,235) 5,767 Cash flow statement and workings Year ended 30 September 2000 2000 1999 £000 £000 Operating profit 2,306 5,184 Depreciation 1,026 160 Amortisation of goodwill 70 - Exchange gains (700) - Profit on acquisition of joint ventures - (53) Income from joint ventures (313) (100) Increase in provisions against joint ventures - 218 Decrease in stocks and work in progress 2,160 4,264 Decrease/(increase) in operating debtors and prepayments 4,979 (1,083) Decrease in creditors and accruals (413) (10,283) Net cash inflow/(out flow) from operating activities 9,115 (1,693) YJL PLC NOTES TO THE ACCOUNTS 1. Segmental analysis External turnover is analysed as follows: 2000 1999 £000 £000 Construction 158,137 154,581 UK Developments 7,634 9,996 USA Developments 11,069 7,037 Turnover: Group and share of joint ventures' turnover 176,840 171,614 Less: Share of USA joint ventures' turnover 6,840 4,291 Continuing operations 170,000 167,323 Acquisitions 21,819 - Discontinued operations 3,430 76,407 External turnover 195,249 243,730 Discontinued operations are Birchwood Concrete Products Ltd which was sold on 31 July 2000, and Lovell Espana which was liquidated on 20 December 1999. The directors have not disclosed segmental information relating to profits/losses and net assets since they are of the opinion that to comply fully with the requirements of SSAP25 'Segmental Reporting' would be prejudicial to the interests of the company. As permitted by Section 230 of the Companies Act 1985, the company has not presented its own Profit and Loss account. The profit after taxation for the financial year dealt with in the accounts of the Company was £4,941,000 (1999: profit £2,660,000). 2. Exceptional items Exceptional items are as follows: 2000 1999 £000 £000 Charged to operating profit Costs of redundancies in acquired businesses 682 - Costs of redundancies in other continuing businesses 1,093 - Charged after operating profit Settlement in respect of disposal of discontinued operation 414 - Profit on sale of properties (485) - Charged to interest payable and similar charges Finance costs relating to financial restructuring 855 - Total exceptional items 2,559 - 3. Taxation on profit on ordinary activities 2000 1999 £000 £000 United Kingdom Corporation tax at 30% (1999:30.5%) Current year 268 - Adjustment in respect of prior years 295 - 563 - 4. Earnings per Ordinary share The earnings per Ordinary share is based upon profit after tax for the Group of £1,468,000 (1999: £8,518,000) divided by 76,071,669 (1999: 76,603,409), being the weighted average number of Ordinary shares in issue during the year. The price of the share options outstanding during the year exceeded the average fair value of the Company's shares hence the options have no dilutive effect on the Earnings per Ordinary share calculation. 5. Reconciliation of net debt 2000 1999 £000 £000 (Decrease)/Increase in cash during the year (1,235) 5,767 Cash outflow from movement in borrowings 5,107 10,598 Cash outflow from movement in liquid resources 6,000 116 Changes in debt arising from cash flows 9,872 16,481 Non-cash - (629) Borrowings acquired with joint ventures - (3,000) Borrowings acquired with subsidiaries (3,929) - Finance leases acquired with subsidiaries (217) - Translation differences 1,048 9 Movement in net debt during the year 6,774 12,861 Opening net funds/(debt) 2,091 (10,770) Closing net funds 8,865 2,091 The financial information set out above does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. These preliminary results and the accounts for the year ended 30 September 2000 are subject to final audit and accordingly have not been reported on by the auditors or delivered to the Registrar of Companies. The comparative financial information is based upon the statutory accounts for the financial year ended 30 September 1999. Those accounts, upon which the auditors have given an unqualified opinion, have been delivered to the Registrar of Companies. Statutory accounts for the year ended 30 September 2000 will be delivered to the Registrar in due course.

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