Interim Results
Mentmore Abbey Plc
6 December 2000
MENTMORE ABBEY PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE SIX MONTHS ENDED 31 OCTOBER 2000
Mentmore Abbey plc, the leading space management
group in Europe, announces preliminary results for
the six months ended 31 October 2000.
RECORD RESULTS
- Before goodwill amortisation and exceptional costs:
- earnings per share increased 21% to 4.29p
- EBITDA increased 142% to £16.5 million
- total operating profits of £14.2 million, up 124% on 1999
- profit before tax of £9.5 million, up 75% on 1999
- Personal storage
- operating profits increased 26% to £3.2 million; annualised storage
revenue up 47% or £4.5 million
- acquisition of British Self-Storage, third largest UK
operator, and Une Piece en Plus, leading operator in central Paris,
completed in the period
- 18 new centres (approximately 1 million sq.ft. of new capacity)
added in the six months; now have 38 locations
- Serviced business space
- operating profits from continuing operations £10.2 million
- adding to range of services provided to our 7,000 customers.
Developing message handling facilities and telecommunications
- six new centres opened with a further three under development;
now operating from 227 centres
- Records management
- positive customer reaction to continuing level of investment
in improved product offer
- revenues up 34% on last year; operating profits at £0.9 million
reflect spend
- acquisition of Datavault completed providing strategic
geographic coverage
Commenting on the results and prospects, Nick Smith, Chairman said:
'Once again I am delighted to report on a set of
strong numbers. The continued progress in earnings
per share testifies to the success of the Birkby
acquisition and the benefits that it is bringing to
the enlarged group.
All of our activities are operating in lightly
penetrated, growing markets. The continuing trend for
businesses to look for more flexible solutions to
their space needs means that our service based
solutions are increasingly in demand. We are
extending the level and range of services we offer.
All of this adds to the need for our people to
increase their skills and to accept greater
responsibility which they are doing magnificently.
We continue to add personal storage locations and
new business centres. Throughout this process we are
concerned to continue to add shareholder value.
These results demonstrate that with the
right product and the right people these aims can
and are being satisfied.'
Contacts:
Mentmore Abbey plc, 020 8946 3159
Nick Smith, Chairman
Clive Drysdale, Finance director
Kim Taylor-Smith, Chief executive
Buchanan Communications 020 7466 5000
Charles Ryland/Catherine Miles
Bridgewell Limited 020 7623 3000
Ian Dighe/Greg Aldridge
EDITORS NOTE:
Personal storage
The group has 38 centres providing self managed
storage units for individuals and businesses
on flexible terms.
Serviced business space
The group has 227 serviced business space centres
offering trading or office space on flexible terms
primarily to small and medium sized enterprises in
any business sector.
Records management
The records management business is a partnership with
Iron Mountain Incorporated, the world's leading
records and information management services company.
This business services customers across Europe.
Chairman's statement
Once again I am delighted to be able to report on a
set of strong numbers. Before goodwill amortisation
and exceptionals:
- total operating profit £14.2 million (1999 : £6.4 million) up 124%
- profit before tax £9.5 million (1999 : £5.4 million)up 75%
- EBITDA* £16.5 million (1999 : £6.8 million) up 142%
- earnings per share 4.29 pence (1999 : 3.56 pence) up 21%
* Earnings before interest, taxes, depreciation and amortisation
Highlights of the half-year have included:
- acquisition of British Self-Storage ('BSS'), third largest UK personal
storage operator
- acquisition of Une Piece en Plus ('UPP'), largest personal
storage operator in central Paris
- opening of three new storage centres in U.K. and a major extension at
our Battersea centre
- addition of six new serviced business centres
- continued investment in Iron Mountain Europe
Direct comparisons of actual earnings are still
affected by the acquisition of Birkby last
September. However, the continued progress in
earnings per share testifies to the success of that
acquisition and the benefits it is bringing to
the enlarged group.
Personal storage grew rapidly during the six
months, adding almost 1 million square feet of new
capacity and increasing the number of sites to 38
compared with 17 a year ago.
The annualised income of Abbey Storage increased by
£4.5 million of which over £1.6 million was
generated from existing centres. Average prices
increased by 5% in the period. Although we continue
to invest in the accelerated opening programme
operating profits were still 26% ahead of last year
at £3.2 million.
The acquisition of BSS, the third largest UK
operator, added six new centres located in parts of
the country in which we were not represented:
(Bristol (2), Bath, Manchester (2) and Reading). The
Reading centre is the largest custom-built
personal storage facility in Europe and has been
well received by customers. During November we
opened another centre in London, one in central
Birmingham and completed a 20,000 sq. ft extension to
our existing site in Battersea. Our strategy is to
incorporate a mixture of serviced accommodation and
personal storage into our new centres. This has
proved to be both extremely popular with customers
and has accelerated income generation.
In September we acquired UPP, the leading
personal storage operator in the central Paris
market. UPP has four centres and its own strong
management team with proven expertise. Since
acquisition we have acquired two further excellent
sites. Work has started on a centre in Southwest
Paris and we shall start work on a centre under
the Montparnasse Tower as soon as regulatory
approval has been finalised. When all six centres
are open UPP will have over 250,000 sq. ft. of
lettable space. The Parisian self-storage market has
the same economic dynamics as London and is trading
above our expectations.
Serviced business space has continued to grow
and we are expanding the range of services
offered to our customers. Our objective is to
provide flexible serviced accommodation to a wide
range of businesses with a particular focus on the
SME market. We now have a national network of
227 centres providing accommodation to over 7,000
customers. Operating profits for the period grew to
£10.2 million. Any comparison with last year is
made irrelevant by the fact that we only owned the
business for two months in that reporting period.
In the half year we opened six new centres and have
a further three centres in the course of
development. Queens Dock Centre in Liverpool totals
over 90,000 sq. ft, of which 10,000 sq. ft. is used
for personal storage; we are already more than
doubling this to meet customer demand. A major
investment is being made at our new site at Radway
Green on junction 16 of the M6. In addition to the
successful business that is already open we have
plans to develop 20 units on the 26 acre site and
to convert an existing 225,000 sq. ft. building to
provide a mixture of serviced light industrial and
office units.
Over recent years we have seen a change in the mix
of customers we serve. Traditional manufacturing
industries have been replaced by service and
technology businesses. In response to this change, we
are developing a range of enhanced services aimed at
helping to grow the businesses of our 7,000
customers and generating additional income. Two
exciting new examples are the provision of a message
handling facility and telecommunications. The
messaging facility will allow us to provide typical
reception facilities on un-manned sites. In
conjunction with a leading telephone provider we will be
able to offer customers improved services at
competitive rates. The infrastructure for this will
then allow us to offer a range of Internet products
to our customers as well as letting them benefit in
their own trading.
Iron Mountain Europe ('IME'), our records
management joint venture, has continued to invest
in the business. Thus, although sales revenues
are up 34% on last year, operating profits were
down 22% to £0.9 million. The high levels of
investment in the UK, which will leave the
business in a far stronger position going forward,
are now reducing. We are receiving positive
customer reaction to the improved response
levels and expect results to reflect the overall
improvements to the business that are being achieved.
IME have today completed the acquisition of
Datavault Ltd. This company and four joint
ventures across continental Europe were acquired
by Iron Mountain Incorporated as part of
their acquisition of Pierce Leahy earlier this
year. Datavault has already been incorporated into
the management structure and will provide valuable
additional geographic coverage. We have issued to
IME and placed on their behalf shares to the value
of £12.3 million. This will enable IME to complete
the Datavault purchase while maintaining our equity
position in IME.
Dividend
We are maintaining the interim dividend at 0.402
pence per ordinary share. This will be paid on 6
April 2001 to shareholders on the register on 2 March
2001.
Outlook
All of our activities are operating in lightly
penetrated,
growing markets. The continuing trend for businesses
to look for more flexible solutions to their space
needs means that our service based solutions
are in increasing demand. We are
extending the level and range of services we offer.
All of this adds to the need for our people to
increase their skills and to accept greater
responsibility which they are doing magnificently.
We continue to add personal storage locations and
new business centres. Throughout this process we are
concerned to continue to add shareholder value.
These results demonstrate that with the right
product and the right people these aims can and are
being satisfied.
Group profit and loss account
for the six months ended 31
October 2000
Six Six
months months
ended ended Year
31 31 ended
October October 30 April
2000 1999 2000
Notes £'000 £'000 £'000
Turnover 2
Continuing operations:
Group and share of joint
venture 41,998 20,414 60,275
Less: Group's share of joint
venture (7,815) (5,841) (13,338)
------- ------- -------
Group 34,183 14,573 46,937
Acquisitions 1,478 - -
------- ------- -------
35,661 14,573 46,937
Discontinued operations - 1,031 1,851
------- ------- -------
35,661 15,604 48,788
======= ======= =======
Operating profit
Continuing operations:
Existing activities 12,795 5,122 17,336
Acquisitions 552 - -
Goodwill amortisation and
exceptionals (2,483) (1,270) (3,637)
------- ------- -------
10,864 3,852 13,699
Discontinued activities - 108 520
------- ------- -------
10,864 3,960 14,219
------- ------- -------
Share of operating profit in
joint venture:
Before goodwill amortisation 881 1,135 2,398
Goodwill amortisation (340) (127) (402)
------- ------- -------
541 1,008 1,996
Total operating profit 2 11,405 4,968 16,215
Before goodwill amortisation
and exceptionals 14,228 6,365 20,254
Goodwill amortisation and 2
exceptionals (2,823) (1,397) (4,039)
Loss on disposal of
operations - - (467)
Income from other fixed asset
investments 476 - 190
------- ------- -------
Profit on ordinary activities
before interest 11,881 4,968 15,938
Net interest payable (5,202) (922) (4,754)
------- ------- -------
Profit on ordinary activities
before taxation 6,679 4,046 11,184
Taxation 3 (2,154) (1,212) (2,336)
------- ------- -------
Profit on ordinary activities
after taxation 4,525 2,834 8,848
Before goodwill amortisation
and exceptionals 4 7,348 4,080 12,515
Goodwill amortisation and
exceptionals (2,823) (1,246) (3,667)
Dividends (752) (689) (2,099)
------- ------- -------
Retained profit for the
period 3,773 2,145 6,749
======= ======= =======
Earnings per share 4
Basic 2.64p 2.47p 6.20p
Basic before goodwill
amortisation and exceptionals 4.29p 3.56p 8.77p
Diluted 2.57p 2.43p 6.08p
Diluted before goodwill
amortisation and exceptionals 4.18p 3.50p 8.60p
Dividends per share 0.402p 0.402p 1.222p
Group balance sheet
as at 31 October 2000
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
Fixed assets
Intangible assets 108,647 79,214 76,005
Tangible assets 204,405 161,428 179,505
Investment in joint venture 21,808 14,715 20,056
- share of gross assets 34,686 29,892 33,460
- share of gross liabilities (28,504) (23,251) (26,916)
-------- -------- --------
- share of net assets 6,182 6,641 6,544
- loans to joint venture 15,626 8,074 13,512
Own shares 257 - 258
Other investments 20,488 20,488 20,488
-------- -------- --------
355,605 275,845 296,312
-------- -------- --------
Current assets
Stocks 1,217 1,858 1,815
Assets held for resale 6,564 12,269 6,875
Debtors 7,994 17,071 8,763
Cash at bank and in hand 8,631 31 615
-------- -------- --------
24,406 31,229 18,068
Creditors:
Amounts falling due within
one year (86,820) (52,018) (29,293)
-------- -------- --------
Net current liabilities (62,414) (20,789) (11,225)
-------- -------- --------
Total assets less current
liabilities 293,191 255,056 285,087
Creditors:
Amounts falling due after more
than one year (110,632) (81,371) (106,589)
Provisions for liabilities and
charges (851) (579) (842)
-------- -------- --------
Net assets 181,708 173,106 177,656
======== ======== ========
Capital and reserves
Called up share capital 17,215 17,128 17,186
Share premium account 115,030 113,686 114,843
Other reserve 27,226 27,226 27,226
Profit and loss account 22,237 15,066 18,401
-------- -------- --------
Equity shareholders' funds (Note 5) 181,708 173,106 177,656
======== ======== ========
The balance sheet as at 31 October
1999 has been restated to include
loans to joint venture within fixed
assets so as to be consistent with
the disclosure adopted at 30 April 2000.
Group cash flow statement
for the six months ended 31 October 2000
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
Cash flow from operating
activities (Note 6) 15,917 5,374 23,792
Returns on investment and
servicing of finance (3,263) (452) (2,646)
Taxation 480 (474) (4,357)
Capital expenditure (15,166) (2,075) (23,634)
Loans made to joint venture (1,423) (7,969) (13,512)
Acquisitions and disposals (24,426) (48,449) (68,845)
Equity dividends paid (1,410) (678) (1,367)
-------- -------- --------
Cash outflow before use of
financing (29,291) (54,723) (90,569)
Financing 26,934 50,060 74,012
-------- -------- --------
Decrease in cash in the period (2,357) (4,663) (16,557)
======== ======= ========
Reconciliation of net cash
flow to movement in net debt
for the six months ended
31 October 2000
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
Decrease in cash in the
period (2,357) (4,663) (16,557)
Cash inflow from change in
debt and lease financing (26,718) (49,801) (73,722)
-------- -------- --------
Change in net debt resulting
from cash flows (29,075) (54,464) (90,279)
Loans and finance leases
(acquired) / divested with
subsidiary undertakings (6,102) (61,601) (33,000)
Non-cash movements (8,243) - 183
-------- -------- --------
Movement in net debt in the period (43,420) (116,065)(123,096)
Net (debt) / funds at beginning of
the period (107,621) 15,475 (15,475)
-------- -------- --------
Net debt at end of the period
(note 7) (151,041) (100,590)(107,621)
========= ======== =======
Non-cash movements includes £8.2 million of vendor
loan notes issued on the acquisition of British
Self-Storage.
Notes to the interim results
for the six months ended 31 October 2000
1. Basis of preparation
The interim results have not been audited but
have been reviewed by the auditors. They have been
prepared on the basis of accounting policies consistent
with those adopted for the year ended 30 April
2000 as set out in the financial statements of
the group. The comparative figures for the year
ended 30 April 2000 and other financial
information contained herein do not
constitute statutory accounts within the meaning
of Section 240 of the Companies Act 1985.
Statutory accounts for the year ended 30 April 2000,
which received an audit report which was unqualified
and did not contain statements under Section 237(2) or (3)
of the Companies Act 1985, have been
filed with the Registrar of Companies.
2. Segmental analysis
Group cash flow statement
for the six months ended 31
October 2000
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
Turnover
Continuing operations:
Personal storage 7,358 5,095 10,625
Serviced business space 26,910 7,918 33,131
Other 1,393 1,560 3,181
------ ------ ------
35,661 14,573 46,937
Discontinued operations:
Serviced business space - 255 860
Other - 776 991
------ ------ ------
35,661 15,604 48,788
------ ------ ------
Total operating profit
Continuing operations:
Personal storage 3,166 2,511 5,126
Serviced business space 10,206 2,700 12,417
Records management 881 1,135 2,398
Other (25) (89) (207)
Goodwill amortisation (2,823) (793) (3,049)
Exceptional costs - (604) (990)
------ ------ ------
11,405 4,860 15,695
Discontinued operations:
Serviced business space - 161 617
Other - (53) (97)
------ ------ ------
11,405 4,968 16,215
------ ------ ------
Exceptional charges against
operating profit comprise:
Termination costs in relation to
former directors of Birkby - 604 604
Loss on sale of Homeware Brands'
cutlery activities - - 386
------ ------ ------
- 604 990
Goodwill amortisation of £2.8 million for the
six months ended 31 October 2000 includes
£0.5 million relating to acquisitions in the
period.
3. Taxation
The tax charge for the six months ended 31
October 2000 is based on the estimated rate
applicable for the year ending 30 April 2001.
4. Earnings per share
Basic earnings per share are calculated on
profit after tax of £4.5 million (1999 :
£2.8 million), divided by 171.4 million
ordinary shares (1999 : 114.6 million
ordinary shares) being the weighted average
number of shares in issue during the period.
Diluted earnings per share are calculated after
allowing for the dilutive effect of conversion
into ordinary shares of the weighted average
number of share options outstanding during the year.
The number of shares used for the diluted earnings
per share calculation was 175.8 million (1999 : 116.6
million). The weighted average number of
shares used to calculate earnings
per share excludes shares held by the Quest.
Basic earnings per share before goodwill
amortisation and exceptionals has been
separately disclosed on the face of the
profit and loss account to facilitate comparison
of the underlying performance of the group.
The calculation uses the same weighted average
number of shares in issue as for the basic
earnings per share but reflects the following
items:
Profit after tax
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
As for basic earnings per
share 4,525 2,834 8,848
Goodwill amortisation 2,823 793 3,049
Exceptional items charged
against total operating
profit - 604 990
Loss on disposal of
operations - - 467
Tax effect of above - (151) (839)
------ ------ ------
As for basic earnings per share
before goodwill amortisation and
exceptionals 7,348 4,080 12,515
------ ------ -------
Earnings per share
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
P P P
Basic earnings per share 2.64 2.47 6.20
Goodwill amortisation 1.65 0.69 2.14
Exceptional items charged
against total operating
profit - 0.53 0.69
Loss on disposal of
operations - - 0.33
Tax effect of above - (0.13) (0.59)
------ ------ -------
Basic earnings per share before
goodwill amortisation and
exceptionals 4.29 3.56 8.77
------ ------ -------
Diluted earnings per share before goodwill
amortisation and exceptionals similarly
reflects the above adjustments but uses the
same weighted average number of shares in issue
as for diluted earnings per share.
5. Movement in equity shareholders' funds
Equity shareholders' funds have increased to
£181.7 million at 31 October 2000 from £177.7
million at 30 April 2000 as a result of the
retained profit of £3.8 million for the six
months to 31 October 2000 and the issue of
shares valued at £0.2 million.
6. Reconciliation of operating profit to cash
flow from operating activities
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
Operating profit 10,864 3,960 14,219
Goodwill amortisation 2,483 666 2,647
Depreciation charge 1,775 728 2,312
(Profit) / loss on sale of
tangible fixed assets (1) - 11
Decrease in stocks and assets held
for resale 909 34 5,384
Decrease / (increase) in debtors 1,070 123 (749)
Decrease in creditors (1,192) (140) (44)
Increase in provision for
liabilities and charges 9 3 12
------ ------ ------
15,917 5,374 23,792
====== ====== ======
7. Net debt
Net debt comprises:
Six months Six months Year
ended ended ended
31 31 30
October October April
2000 1999 2000
£'000 £'000 £'000
Cash at bank and in hand 8,631 31 615
Overdrafts (12,046) (17,796) (1,673)
Bank loans (139,376) (82,806) (106,544)
Finance leases (7) (19) (19)
Deferred acquisition loan notes (8,243) - -
--------- --------- ---------
(151,041) (100,590) (107,621)
========= ========= =========
Bank loans, finance leases and deferred
acquisition loan notes include amounts due
after more than one year amounting to £110.5
million (1999 : £78.6 million).
8. Interim results statement
The interim results statement, which was
approved by the Board on 6 December
2000, will be posted to all
shareholders. Thereafter copies may be
obtained from the Company Secretary, Mentmore
Abbey plc, Park House, 14 Pepys Road, London
SW20 8NH.
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