Final Results
Safeland PLC
26 June 2006
SAFELAND PLC
Year Ended 31 March 2006
Chairman's Statement
The year ended 31 March 2006 is the first that we have prepared accounts under
IFRS and this adoption has necessitated a restatement of comparative figures.
For this year I am reporting that Safeland made a loss before tax of £1,151,000
(2005: restated profit £1,842,000) and that the resultant earnings per share was
a loss of 4.77p (2005: restated profit 6.32p). Net assets per share at the year
end were 111p compared with 107p as restated as at 31 March 2005.
Over the past few years I have consistently advised you of the difficult
conditions prevailing within the property trading market. These conditions
continued to be apparent during the year under review and there is little sign
of them abating.
In accordance with IFRS the loss as stated above is after property revaluation
gains of £391,000 (2005: £99,000) which now appear on the face of the Income
Statement. The loss also includes a loss of £536,000 (2005: £628,000) from
Espazio, the Italian self storage company.
During the year under review the company undertook 47 transactions compared to
60 in the previous year with an average lot size of £332,000 (2005: £472,000).
Revenue for the current year was £15,588,000 compared to £28,456,000 in the year
ended 31 March 2005. Gearing at the year end was 69% (2005: 53%).
Post the balance sheet date Safeland has announced that it has sold its 12.5%
stake in Serviced Office Group plc. The sale of this stake produced proceeds of
£867,000 and a profit on disposal of £133,000.
It has also recently been announced that subject to shareholder approval
Safeland intends to accept the offer made by Highcross (Bugatti) Ltd for the
entire issued share capital of Bizspace Plc in which we hold a 7.85% stake.
Provided this offer goes unconditional Safeland will receive just over £6m in
cash with a resultant profit on disposal of £3.6m. Both of these investments
are stated at fair value in the balance sheet and the relevant tax is provided
for.
Trading during the first three months has been satisfactory and I am content
with the stock we hold at present. We remain in a very strong financial
position to take advantage of opportunities as they become available and
continue to enjoy excellent relationships with both our banks and professional
advisors.
Raymond Lipman
Chairman
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2006
Note 2006 2005
£'000 £'000
Unaudited Audited
Revenue 2 15,588 28,456
Cost of sales (13,526) (23,975)
Gross profit 2,062 4,481
Sales and distribution costs (394) (625)
Administrative expenses (3,770) (3,528)
Other operating income 132 333
Gains on revaluation of investment properties 391 99
Profit on disposal of investment properties 103 476
Profit on disposal of subsidiaries 3 852 1
Operating (loss)/profit (624) 1,237
Share of results of associates - post tax (17) (74)
Profit on disposal of available-for-sale investments - 1,201
(Loss)/profit before interest (641) 2,364
Finance income 285 234
Finance costs (795) (756)
(Loss)/profit before tax 2 (1,151) 1,842
Tax 269 (629)
(Loss)/profit for the financial year (882) 1,213
Basic and diluted (loss)/earnings per share 5 (4.77p) 6.32p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 March 2006
Note 2006 2005
£'000 £'000
Unaudited Audited
Fair value gains on available-for-sale investments 2,370 1,104
Exchange differences on translation of foreign (23) (27)
operations
Tax on items taken directly to equity (706) (76)
Net income recognised directly in equity 1,641 1,001
Transfer to profit on sale of available-for-sale - (797)
investments
Tax on items transferred from equity - 141
(Loss)/profit for the year (882) 1,213
Total recognised income and expense for the year
available to equity shareholders 8 759 1,558
CONSOLIDATED BALANCE SHEET
Year Ended 31 March 2006
Note 2006 2005
£'000 £'000
Unaudited Audited
Non-current assets
Property, plant and equipment 6,095 5,940
Investment properties 4,632 4,305
Interests in associates 14 36
Available-for-sale investments 6,544 4,104
Deferred tax assets 290 -
Total non-current assets 17,575 14,385
Current assets
Trading properties 16,387 11,543
Trade and other receivables 1,408 5,448
Cash and cash equivalents 7 1,903 2,440
Total current assets 19,698 19,431
Total assets 37,273 33,816
Current liabilities
Bank loans and overdrafts 11,932 813
Trade and other payables 1,043 2,286
Current tax liabilities 226 650
Total current liabilities 13,201 3,749
Non-current liabilities
Bank loans 2,247 9,762
Deferred tax liabilities 1,254 458
Derivative financial instruments 16 51
Total non-current liabilities 3,517 10,271
Total liabilities 16,718 14,020
Net assets 20,555 19,796
Equity
Share capital 925 925
Share premium account 5,351 5,351
Capital redemption reserve 765 765
Translation reserve (50) (27)
Retained earnings 13,564 12,782
Total equity 8 20,555 19,796
CONSOLIDATED CASH FLOW STATEMENT
Year Ended 31 March 2006
Note 2006 2005
£'000 £'000
Unaudited Audited
Operating activities
Net cash (outflow)/inflow from operations 6 (10,187) 1,621
Interest paid (830) (820)
Tax (paid)/received (205) 107
Net cash (outflow)/inflow from operating
activities (11,222) 908
Investing activities
Interest received 249 185
Purchase of investment properties (412) (1,689)
Purchase of property, plant and equipment (675) (660)
Purchase of available-for-sale investments (65) -
Proceeds from sale of property, plant and
equipment
184 215
Proceeds from sale of investment properties 349 1,940
Proceeds from sale of available-for-sale -
investments
3,259
Dividends received from available-for-sale 36
investments
49
Disposal of subsidiaries 7,415 52
Net cash inflow from investing activities 7,081 3,351
Financing activities
Proceeds from issue of share capital - 50
Purchase of own shares - (760)
New loans 21,251 17,394
Loan repayments (17,993) (20,311)
Net cash inflow/(outflow) from financing
activities 3,258 (3,627)
Net (decrease)/increase in cash and cash
equivalents (883) 632
Cash and cash equivalents at beginning of 2,430 1,798
year
Cash and cash equivalents at end of year 7 1,547 2,430
NOTES TO THE PRELIMINARY ANNOUNCEMENT
Year ended 31 March 2006
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 2006 or 2005. The
statutory financial statements for the year ended 31 March 2006 will be
finalised and signed 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 financial information for the year ended 31 March 2005 is derived from the
statutory accounts for that year as restated for the adoption of IFRS. The
auditors reported on those statutory accounts which have been delivered to the
Registrar of Companies; their report was unqualified and did not contain a
statement under s237(2) or (3) of the Companies Act 1985.
This announcement is prepared on the basis of the accounting policies published
on 12 December 2005 within the 2005 IFRS restatement and the interim financial
statements for the period ended 30 September 2005.
This preliminary announcement was approved by the Board of directors on 23 June
2006.
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. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the group is currently organised into two operating
divisions as detailed below:
• property trading, property refurbishment and property investment; and
• self-storage
These divisions are the basis on which the group reports its primary segmental
information.
Geographical segments
The group's operations are wholly based in the United Kingdom except the
self-storage operation which operates in Italy.
No additional segmental disclosure is provided in respect of geographical
segments as they are identical to the business segments detailed above.
Property trading,
refurbishment and
investment Self-storage Total
2006 2005 2006 2005 2006 2005
£'000 £'000 £'000 £'000 £'000 £'000
Unaudited Audited Unaudited Audited Unaudited Audited
Revenue 15,255 28,263 333 193 15,588 28,456
Segment result (88) 1,865 (536) (628) (624) 1,237
Share of result of associates - (17) (74)
post tax
Profit on disposal of
available-for-sale investment - 1,201
Finance income 285 234
Finance costs (795) (756)
(Loss)/profit before tax (1,151) 1,842
Tax 269 (629)
(Loss)/profit for the financial (882) 1,213
year
Balance sheet
Segment assets 26,578 25,355 4,137 4,321 30,715 29,676
Interests in associates 14 36
Available-for-sale investments 6,544 4,104
Total assets 37,273 33,816
Segment liabilities 14,434 11,779 1,502 2,165 15,936 13,944
Deferred tax liabilities 782 76
Total liabilities 16,718 14,020
3. PROFIT ON DISPOSAL OF SUBSIDIARIES
Three wholly-owned subsidiaries of Safeland plc were sold during the year,
Argentwood Limited, Harvestglen Properties Limited and CFC 26 Limited. None of
the subsidiary undertakings sold contributed any pre-tax results to the group in
the year (2005: £nil).
The following table sets out the book value of assets and liabilities disposed.
Argentwood Harvestglen CFC 26
Limited Properties Limited Total
£'000 Limited £'000 £'000
£'000
Investment properties 230 - - 230
Trading properties - 4,977 1,356 6,333
Net assets 230 4,977 1,356 6,563
Profit/(loss) on disposal (5) 823 34 852
225 5,800 1,390 7,415
Satisfied by
Cash 225 5,800 1,390 7,415
4. EQUITY DIVIDENDS
The company demerged seven subsidiaries during the year ended 31 March 2005
representing 90% of the ordinary share capital of each company. No interim cash
dividend has been paid or final dividend declared in either year.
5. (LOSS)/EARNINGS PER SHARE
Basic and diluted loss of 4.77p (2005: earnings per share 6.32p) are based on
the loss for the financial year of £882,000 (2005: profit of £1,213,000) and on
18,500,530 ordinary shares (2005: 19,207,059 ordinary shares) being the weighted
average number of shares in issue throughout the year.
The calculation of diluted (loss)/earnings per share uses the same earnings
figure and weighted average number of shares as the basic calculation, as there
are no dilutive options or instruments.
6. NOTES TO THE CASH FLOW STATEMENT
2006 2005
£'000 £'000
Unaudited Audited
Operating (loss)/profit (624) 1,237
Adjustments for:
Depreciation of property, plant and equipment 343 269
Profit on sale of property, plant and equipment (7) (16)
Profit on sale of investment properties (103) (476)
Gains on revaluation of investment properties (391) (99)
Profit on sale of subsidiaries (852) (1)
Changes in working capital:
(Increase)/decrease in trading properties (11,177) 1,457
Decrease/(increase) in trade and other receivables 3,890 (1,218)
(Decrease)/increase in trade and other payables (1,266) 468
Net cash (outflow)/inflow from operations (10,187) 1,621
7. CASH AND CASH EQUIVALENTS
2006 2005
£'000 £'000
Unaudited Audited
Cash and cash equivalents per balance sheet 1,903 2,440
Bank overdrafts (356) (10)
Cash and cash equivalents per cash flow statement 1,547 2,430
8. RECONCILIATION OF CHANGES IN EQUITY
2006 2005
£'000 £'000
Unaudited Audited
1 April 2005 19,796 19,270
Issue of share capital - 50
Purchase of own shares - (760)
19,796 18,560
Total recognised income and expense for the year 759 1,558
20,555 20,118
Dividends - (322)
31 March 2006 20,555 19,796
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