Final Results

Safeland PLC 16 June 2003 SAFELAND PLC Preliminary Announcement 31 March 2003 CHAIRMAN'S STATEMENT I am pleased to be able to write to shareholders with regard to the year ended 31 March 2003 as this has proved to be Safeland's second most successful year in terms of trading profit, since its flotation in 1989. Profit before taxation for the year is £3,522,000 (2002: £257,000), with a resultant earnings per share of. 10.33p (2002: loss per share of 0.81p). Particularly successful during the year has been our residential property joint venture, which contributed just under £2.5 million (2002: £570,000) profit before taxation. Notwithstanding the profits that have been achieved during the year under review, I must continue to advise shareholders that market conditions are still proving to be extremely difficult, particularly concerning the identification of suitable trading stock. The situation remains similar to that described in my previous two statements. What is evident, however, is that this stock shortage is prevalent throughout the marketplace and often means that properties are being sold profitably shortly after they are acquired. During the year under review, Safeland undertook 92 transactions compared with 79 in the previous year with an average lot size in excess of £530,000. Turnover for the current year is £26,101,000 compared to £24,477,000 in the year ended 31 March 2002. As a result of the profit that has been achieved in the year, and the continuing policy of purchasing own shares, net asset value has risen to 91p compared to 74p in March 2002, an increase of 23%. The continuing purchase of own shares by the company for cancellation has proved to be successful in two specific areas. Firstly, it has had a positive effect on net asset value per share, and secondly despite the global stock market falls that have been endured, Safeland has maintained its share price and stands at 46.5p today compared to 46.5p as at 31 March 2002 and 47p as at 31 March 2001. This compares highly favourably with the FTSE Fledgling index, which stood at 1542.7 at 31 March 2003, 2042.0 as at 31 March 2002, and 2104.6 at 31 March 2001. There is, therefore, sufficient evidence to suggest that purchasing own shares is a policy that Safeland should be continuing, and accordingly, it has been decided that once again the Board will not be declaring a dividend, but preferring to utilise available funds both for its trading activities and the opportunity to purchase shares as the Board feels appropriate. During the year, we moved to our new head office in Finchley at a cost of just over £1 million including refurbishment, having realised a substantial profit against cost on our previous premises. As part of our wider strategy of diversification and investment, on 27 March 2003, Safeland announced that it had entered into put and call options over a 25% per cent stake in an AIM-listed company called Tecc-IS plc. It has since exercised its option. As part of this wider strategy, our Italian self storage joint venture continues to grow, with our centre in Rome open and operational and two others in Milan due to open in the not too distant future. Notwithstanding the market having stayed relatively stagnant for a couple of years, Safeland has continued to exhibit its expertise in property trading and is extremely well positioned as always to take advantage of any changes as and when they occur. CONSOLIDATED PROFIT AND LOSS ACCOUNT Year ended 31 March 2003 Note 2003 2002 £'000 £'000 Unaudited Audited TURNOVER Group and share of joint venture 30,521 25,254 Less: share of joint venture (4,420) (777) Group turnover 2 26,101 24,477 Cost of sales (22,650) (21,350) GROSS PROFIT 3,451 3,127 Sales and distribution expenses (341) (301) Administrative expenses (3,411) (2,531) Other operating income 501 251 Group operating profit 200 546 Share of operating profit of joint ventures 3 2,564 570 TOTAL OPERATING PROFIT 2,764 1,116 Profit on disposal of fixed assets - 302 376 investment properties Profit (loss) on disposal of investments 72 (98) Profit on disposal of subsidiary and 6 550 490 associated undertakings PROFIT ON ORDINARY ACTIVITIES BEFORE 3,688 1,884 INTEREST AND SIMILAR INCOME Interest receivable and similar income 717 570 Amounts written off investments - (1,195) Interest payable and similar charges (883) (1,002) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 3,522 257 Tax charge on profit on ordinary activities (1,106) (463) PROFIT (LOSS) ON ORDINARY ACTIVITIES AFTER 2,416 (206) TAXATION Equity dividends paid and proposed 4 - (252) RETAINED PROFIT (LOSS) FOR THE FINANCIAL YEAR 2,416 (458) Basic and diluted earnings (loss) per share 5 10.33p (0.81)p All results in both the current and the preceding financial year derive from continuing operations. CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Year ended 31 March 2003 2003 2002 £'000 £'000 Unaudited Audited Profit (loss) for the financial year 2,416 (206) Unrealised surplus on revaluation of investment 70 545 properties Total recognised gains and losses for the year 2,486 339 NOTE OF HISTORICAL COST PROFITS AND LOSSES 2003 2002 £'000 £'000 Unaudited Audited Profit on ordinary activities before taxation 3,522 257 Realisation of property revaluation gains of earlier 1,463 - years Historical cost profit on ordinary activities before 4,985 257 taxation Historical cost profit (loss) retained for the year 3,879 (458) after taxation and dividends CONSOLIDATED BALANCE SHEET 31 March 2003 Note 2003 2002 £'000 £'000 Unaudited Audited FIXED ASSETS Tangible assets 4,993 2,103 Investment properties 2,808 5,008 Investment in joint venture Share of gross assets 4,564 2,213 Share of gross liabilities (1,144) (1,295) 3,420 918 Investment in associated undertakings 12 1,000 - Investments 4,281 4,732 16,502 12,761 CURRENT ASSETS Stocks 5,965 9,375 Debtors: Amounts falling due within one year 3,826 1,967 Amounts falling due after more than one - 4,185 year Cash at bank and in hand 4,783 3,402 14,574 18,929 CREDITORS: amounts falling due (5,122) (3,576) within one year NET CURRENT ASSETS 9,452 15,353 TOTAL ASSETS LESS CURRENT LIABILITIES 25,954 28,114 CREDITORS: amounts falling due after more (6,905) (9,395) than one year 19,049 18,719 CAPITAL AND RESERVES Called up equity share capital 1,047 1,260 Share premium account 5,304 5,304 Capital redemption reserve 640 427 Investment property revaluation reserve 586 1,979 Profit and loss account 11,472 9,749 EQUITY SHAREHOLDERS' FUNDS 11 19,049 18,719 CONSOLIDATED CASH FLOW STATEMENT Year ended 31 March 2003 Note 2003 2002 £'000 £'000 Unaudited Audited Net cash inflow from operating activities 7 2,125 238 Returns on investment and servicing of finance 8 (111) (432) Taxation (720) - Capital expenditure and financial investment 8 826 (985) Acquisitions and disposals 8 4,608 7,892 Equity dividends paid - (510) Cash inflow before financing 6,728 6,203 Financing 8 (5,347) (8,895) Increase (decrease) in cash 9 1,381 (2,692) NOTES TO PRELIMINARY ANNOUNCEMENT Year ended 31 March 2003 1. BASIS OF PREPARATION The financial information set out in the announcement does not constitute the company's statutory financial statements within the meaning of section 240 of the Companies Act 1985, for the years ended 31 March 2003 or 31 March 2002. The statutory financial statements for the year ended 31 March 2003 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's Annual General Meeting. The results for the year ended 31 March 2002 have been extracted from the full accounts for that year which have been delivered to the Registrar of Companies on which the auditors have given an unqualified report and which do not contain a statement under sections 237(2) or (3) of the Companies Act 1985. This announcement is prepared on the basis of the accounting policies as stated in the previous year's financial statements. This preliminary announcement was approved by the Board of directors on 16 June 2003. Copies of this announcement are available from the company's registered office at 94-96 Great North Road, London, N2 0NL. The Annual Report and Accounts will be sent to shareholders shortly. 2. SEGMENTAL INFORMATION 2003 2002 £'000 £'000 Unaudited Audited Group turnover by origin and destination Property trading and refurbishment 25,898 23,785 Investment properties 202 692 Self storage 1 - 26,101 24,477 Profit (loss) on ordinary activities before taxation Property trading and refurbishment 3,169 871 Investment properties 488 581 Self storage (135) - Amounts written off investments - (1,195) 3,522 257 Net assets Property trading and refurbishment 13,835 12,470 Investment properties 2,818 4,861 Self storage 2,396 1,388 19,049 18,719 All turnover, results before taxation and net assets in the current and preceding financial year are derived from activities carried out in the United Kingdom, except for the self storage operation, which operates in Italy, and the results and net assets of the Brackdale joint venture, which operates in South Africa and contributed £13,000 (2002: £nil) to profit before taxation in the year and £8,000 (2002: £nil) to net assets. The Brackdale joint venture is reported within property trading and refurbishment. 3. SHARE OF OPERATING PROFIT OF JOINT VENTURES Share of operating profit of joint ventures principally relates to our residential property joint venture. 4. EQUITY DIVIDENDS PAID AND PROPOSED 2003 2002 £'000 £'000 Unaudited Audited Interim equity dividend paid - £nil (2002: 1p per 5p - 252 ordinary share) Final dividend proposed - £nil (2002: £nil) - - - 252 5. EARNINGS (LOSS) PER SHARE Basic and diluted earnings per share of 10.33p (2002: loss of 0.81p) are based on the profit (loss) for the financial year of £2,416,000 (2002: loss of £206,000) and on 23,393,843 ordinary shares (2002: 25,498,569 ordinary shares) being the weighted average number of shares in issue throughout the year. 2003 2002 Unaudited Audited Basic and diluted Net profit (loss) for the year (£) 2,416,000 (206,000) Weighted average number of ordinary shares 23,393,843 25,498,569 outstanding Earnings (loss) per share (p) 10.33p (0.81)p The calculation of diluted earnings per share uses the same earnings figure and weighted average number of shares as the basic calculation, as the exercise value of all share options in issue is higher than the share price at year end. 6. SALE OF SUBSIDIARY AND ASSOCIATED UNDERTAKINGS Three wholly-owned subsidiaries of Safeland plc were disposed of during the year: Olivegate Properties Limited, Woodrose Properties Limited and Dayblue Limited. None of the subsidiary undertakings disposed of contributed any operating results to the group in the year (2002: £nil). The profits recognised on disposal were £300,000, £171,000 and £79,000 respectively. Cash received in respect of these sales was £4,608,000. 7. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2003 2002 £'000 £'000 Unaudited Audited Operating profit 200 546 Depreciation 217 148 Profit on sale of fixed assets (13) (17) Increase in stocks (648) (713) Decrease (increase) in debtors 2,949 (299) (Decrease) increase in creditors (580) 573 Net cash inflow from operating activities 2,125 238 8. ANALYSIS OF CASH FLOWS 2003 2002 £'000 £'000 Unaudited Audited Returns on investment and servicing of finance Interest received 558 427 Interest paid (810) (1,002) Dividends received 141 143 (111) (432) Capital expenditure and financial investment Purchase of tangible fixed assets (2,540) (1,780) Purchase of investment properties (1,091) (657) Purchase of investments - (391) Disposal of tangible fixed assets 439 286 Disposal of investment properties 3,495 1,507 Disposal of investments 523 50 826 (985) Acquisitions and disposals Net sale of investment in subsidiary and associate 4,608 7,892 Financing Purchase of own shares (2,156) (259) Loan repayments (4,691) (8,636) New borrowings 1,500 - (5,347) (8,895) 9. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 2003 2002 £'000 £'000 Unaudited Audited Increase (decrease) in cash in the year 1,381 (2,692) Cash outflow from decrease in debt 3,191 8,636 Change in net debt resulting from cash flows 4,572 5,944 Net debt brought forward (6,356) (12,300) Net debt carried forward (1,784) (6,356) 10. ANALYSIS OF NET DEBT At Cash flows At 31 March 2002 £'000 31 March 2003 £'000 Unaudited £'000 Audited Unaudited Cash at bank and in hand 3,402 1,381 4,783 3,402 1,381 4,783 Debt due within one year (363) (294) (657) Debt due after one year (9,395) 3,485 (5,910) (6,356) 4,572 (1,784) 11. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS 2003 2002 £'000 £'000 Unaudited Audited Profit (loss) for the financial year 2,416 (206) Dividends - (252) 2,416 (458) Other recognised gains and losses 70 545 Repurchase of shares (2,156) (259) Net increase (reduction) in equity shareholders' funds 330 (172) Opening equity shareholders' funds 18,719 18,891 Closing equity shareholders' funds 19,049 18,719 12. POST BALANCE SHEET EVENTS Acquisition of participating interest in Tecc-IS On 27 March 2003, Safeland plc acquired an option to purchase 25% of the share capital of Tecc-IS plc, an AIM-listed company. On 9 April 2003, Safeland plc exercised the option and purchased 10,843,250 Tecc-IS shares for £1 million, representing 25% of the ordinary share capital. In line with FRS 9, the option to acquire the participating interest was accounted for as a participating interest and on this basis, Tecc-IS has been accounted for as an associate at the balance sheet date. Repayment of Brackdale loan and subsequent guarantee Subsequent to the balance sheet date, Brackdale has entered into a secured loan from a Mauritian bank, Investec. Safeland plc has lodged the 8 million Rand raised in the loan with Investec as security for the loan, which will be released once the procedures for securing the loan against the property owned by Brackdale have been completed. END This information is provided by RNS The company news service from the London Stock Exchange

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