Interim Results - 6 Months to 31 March 2000

YJL PLC 01 June 2000 INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2000 --------------------------------------------------- YJL plc today announced interim results for the six months to 31 March 2000. Profit before tax was £1.0m and turnover was £85.1m. The Group recently acquired Britannia Group PLC a construction, property and building materials business and also announced the purchase of Lodge and Sons Ltd a specialist construction company. HIGHLIGHTS ---------- * Profit before tax for the first half of the year was £1.0m (1999: £1.1m) on turnover of £85.1m (1999:138.5m). The comparable for 1999 includes Lovell Partnerships which was sold in June 1999. * Balance sheet cash was £5.1m (1999: debt of £2.6m) and total cash was £2.2m (1999: debt of £14.4m.) The Group has continued a policy of prudent cash management. * Construction division turnover increased by £4.4m to £79.5m. Order book at the end of March stood at £124m (1999: £126.5m). * On 16 March 2000 YJL announced an agreed bid for Britannia Group PLC for a total cash consideration of £12.2m. The offer was declared unconditional on 7 April 2000. The acquisition is in line with YJL's strategy of controlled expansion in UK construction related businesses. * A new management team has now been appointed to take YJL forward as a financially strong group looking for new opportunities as a specialist construction, property and investment business. * The programme to reduce central overheads has continued and the Board are pleased to report substantial reductions. * On 12 May 2000 YJL announced the purchase of Lodge and Sons Limited, a company specialising in the restoration of listed buildings. Commenting on the results, Cedric Scroggs, Chairman of YJL plc said: 'The acquisitions of Britannia Group and Lodge mark the recovery of YJL and our plans to expand the business. The new management team have demonstrated their skills at improving the profitability of the existing businesses and in acquiring new ones. Our balance sheet demonstrates the financial strength of the Group and we are looking at new opportunities in furtherance of our objective of growth through strategic investment.' Enquiries Paul Sellars YJL plc Tel: 020 8982 4313 Chairman's Statement -------------------- In my previous statement to you I have emphasised the Group's commitment to strengthening its balance sheet by reducing the debt burden. Achieving this objective has been a priority and, as a result, I am therefore very pleased to report that the strong cash position at the end of March has enabled the Group, since then, to acquire Britannia Group PLC and more recently Lodge & Sons Limited. The acquisitions mark the recovery of YJL and its plans to expand the business. The Board will continue to seek new opportunities. The management team now led by Roger Feast and Paul Sellars have demonstrated their skills at both improving the profitability of the existing business and in acquiring new ones. Financial Review ---------------- Profits before tax for the six months to 31 March 2000 were £1.0m (1999: £1.1m) on turnover of £85.1m (1999: £138.5m). The 1999 comparative figures include Lovell Partnerships, which was sold in June 1999. As a result of careful cash management within the operating companies and further cash generated by the sale of development properties, non-core assets and the redemption of the mortgage portfolio, the Group is reporting net cash in its balance sheet at 31 March 2000 of £5.1m (1999: net debt of £2.6m) with the total net cash, including off balance sheet borrowing, being £2.2m (1999: net debt of £14.4m). These figures also reflect the improving cash flow from Lovell America. Dividends --------- The Board is presently considering investment opportunities enabling YJL to further build up its earnings base. In the light of this it is considered to be in the shareholders interest to retain financial resources within the Group, increasing the scope for an intended progressive long-term dividend policy. Construction ------------ The construction businesses comprising Lovell Construction, Walter Lilly and Bullock Construction increased turnover for the first half by £4.4m to £79.5m. Each company is performing well within their focus markets where they have staff with excellent experience and knowledge supported by a strongly motivated flat management structure. As reported, YJL has acquired Britannia Construction, a regional contractor based in Cheltenham with an established performance record working with clients such as Tesco and Holiday Inn, and W.F. Knight, a specialist mechanical engineering manufacturer and installer based in Yeovil whose clients include Rolls Royce and Westlands. These acquisitions together with Lodge & Sons Limited enhance the Group's strategy of seeking more negotiated and partnered work with a wide range of clients. Property Division ----------------- The Britannia acquisition brings a useful portfolio of commercial and development properties. These are expected to create a source of profits for the future and sales of selected properties are under negotiation. Further good progress has been achieved in lettings at the Grantham shopping centre. Planning is anticipated shortly at the Castle Brewery in Newark for 50 residential units in a select courtyard setting. Residential land sales are progressing in line with forecast and further property disposals will continue to provide significant cash flows for the Group. Land sales in America continue to help reduce local borrowings. The programme to realise American investments will continue throughout 2000 and should enable Lovell America to reimburse funds to England for the first time since this venture was entered into. Acquisitions ------------ On 7 April 2000, the offer for Britannia Group PLC was declared unconditional for a total cash consideration of £12.2m. Britannia is a Cheltenham based company with businesses in construction, property and building materials and annualised turnover of approximately £50m. This acquisition is in line with YJL's strategy of a controlled expansion in UK construction related businesses. On 12 May 2000, the Group acquired Lodge & Sons for £0.3m. Lodge & Sons is a well established specialist listed building and church restoration company based in Essex with a current turnover in excess of £2m per annum. This acquisition increases the Construction Division's presence in niche markets. Overheads --------- It is the policy of your Board to maintain a small but skilled head office team. The programme to reduce central overheads has continued and considerable benefits on cost savings are now beginning to be realised. In addition, the final costs with regard to the discontinued business of Lovell Espana have now been met. Other non core assets continue to be sold which will assist in both profit generation and cash inflows. Prospects --------- The contribution from the newly acquired businesses together with the three existing Construction companies and the substantial reduction in overheads enable the Group to be confident of future prospects. Further opportunities will be sought in businesses that will add to the portfolio of specialist Construction Companies. Your Board will also seek to use the Group's financial resources and management skills to generate profit from corporate and property related opportunities. Cedric Scroggs 31st May 2000 YJL plc Group Profit and Loss Account for the six months ended 31 March 2000 Notes Six months ended Year ended 31 March 30 September 2000 1999 1999 £000 £000 £000 Restated Restated Turnover - Continuing businesses 85,054 76,941 167,378 Turnover - Discontinued businesses 4 61,601 76,407 Turnover 1 85,058 138,542 243,785 Cost of sales (78,543) (128,850) (224,989) Gross profit 6,515 9,692 18,796 Administrative expenses (4,906) (9,035) (16,101) Income from joint 126 210 100 ventures Other operating income - - 10 Operating profit - Continuing businesses 1,735 367 916 Operating profit - Discontinued businesses 0 500 1,889 Operating profit 1,735 867 2,805 Profit/(loss) on disposal of (314) 1,044 6,816 discontinued businesses Profit on ordinary 1,421 1,911 9,621 activities before interest Net interest payable (384) (807) (1,103) Profit on ordinary activities before taxation 1,037 1,104 8,518 Taxation - - - Retained profit for the period 1,037 1,104 8,518 Basic and Diluted earnings 2 1.4p 1.4p 11.1p per Ordinary share Group Statement of total recognised gains and losses Six months Year ended ended 31 March 30 September 2000 1999 1999 £000 £000 £000 Profit for the year excluding share of 911 894 8,418 income from joint ventures Share of income from 126 210 100 joint ventures Currency translation differences on foreign currency net investment 717 1,223 767 Total recognised gains 1,754 2,327 9,285 and losses relating to the period Group Balance Sheet at 31 March 2000 Notes Six months ended Year ended 31 March 30 September 2000 1999 1999 £000 £000 £000 Restated Restated Fixed assets Tangible assets 3,416 4,046 3,496 Investments in joint ventures: Loans to joint ventures 12,973 16,535 10,868 Share of gross assets 21,975 30,094 24,468 Share of gross liabilities (16,307) (31,705) (19,073) 18,641 14,924 16,263 22,057 18,970 19,759 Current assets Stocks and work in progress 18,502 45,010 20,029 Debtors: due within one year 29,498 32,888 27,016 due after more than one year 1,217 9,101 3,810 Cash at bank and in hand 10,995 11,432 10,014 60,212 98,431 60,869 Creditors: amounts falling due within one year Bank loans and overdrafts 5,864 7,336 2,980 Other creditors 47,277 81,696 45,330 Net current assets 7,071 9,399 12,559 Total assets less 29,128 28,369 32,318 current liabilities Creditors: amounts falling due after more than one year Long term debt - 5,744 4,943 Other creditors 6,826 9,035 6,827 Net assets 22,302 13,590 20,548 Share capital 7,660 26,912 7,660 Share premium account 1,066 31,437 1,066 Revaluation reserve 1,887 1,348 1,348 Capital reserve 314 314 314 Profit and loss account 11,914 (46,960) 10,160 Equity shareholders' funds 22,302 13,590 20,548 Group Statement of Cash Flow for the six months ended 31 March 2000 Six months ended Year ended 31 March 30 September 2000 1999 1999 £000 £000 £000 Net cash inflow from 4,399 9,348 (1,693) operating activities Returns on investments and servicing of finance Net interest 104 (709) (621) received /(paid) Capital expenditure and financial investment Investment in and movements on loans to joint ventures (1,854) 174 (1,550) (Purchases) / (138) 453 20,345 sales of tangible fixed assets Cash inflow before use of liquid resources and financing 2,511 9,266 16,481 Management of liquid resources Movement of liquid resources 530 (812) (116) Financing Repayment of loans (4,944) (2,016) (10,598) (Decrease)/Increase in cash (1,903) 6,438 5,767 Notes to the Accounts for the six months ended 31 March 2000 Note 1 Segmental analysis Six months ended Year ended 31 March 30 September 2000 1999 1999 £000 £000 £000 Restated Restated Construction 79,552 75,111 154,581 Partnerships - 55,367 67,895 UK Developments 3,343 406 10,051 USA Developments 10,057 3,995 7,037 Spain - Discontinued 4 6,234 8,512 Turnover: Group and share of 92,956 141,113 248,076 joint ventures Less: Share of USA joint ventures' turnover 7,898 2,571 4,291 85,058 138,542 243,785 In the year ended 30 September 1999, Partnerships was sold and Spain was treated as a discontinuing business. Spain has now become a discontinued business within the six months ended 31 March 2000. Note 2 Earnings per Ordinary share The earnings per ordinary share is based upon the profit for the Group of £1,037,000 (1999 March profit of £1,104,000; September profit of £8,518,000) divided by the weighted average of ordinary shares of 76,603,409 (1999 March 76,603,409; September 76,603,409) in issue over the respective periods. The price of the share options outstanding during the period exceeded the average fair value of the Company's shares hence the options have no dilutitive effect on the Earnings per Ordinary share calculation. Note 3 Basis of preparation a) The accounts for the six months ended 31 March 2000 and the equivalent period in 1999 have not been audited nor reviewed by the company's auditors. They have been prepared in accordance with applicable accounting standards consistent with the accounting policies set out in the 1999 Annual Report except for the adoption of Financial Reporting Standards 15 and 16. b) The abridged information in this statement relating to the year ended 30 September 1999 is derived from full accounts upon which the auditors issued an unqualified opinion and which have been delivered to the Registrar of Companies. This interim statement is being sent to all shareholders and is also available upon request from the Company Secretary, YJL plc, Lovell House, 616 Chiswick High Road, London, W4 5RX.

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