Final Results

RNS Number : 7083W

Safeland PLC

16 June 2008

 



SAFELAND PLC

16 June 2008

HIGHLIGHTS

Safeland Plc, the property fund management and property trading group announces its unaudited results for the year ended 31 March 2008.

Financial Highlights:

• Revenue of £23.567m (2007: £21.472m);

• Loss before tax £0.977m after property write down of £1.463m;

• EPS loss of 3.92p (2007: earnings 12.68p);

• NAV per share maintained at 114p;

• Gearing now stands at 110%;

Operational Highlights:

• £61m of assets under management in managed workspace fund;

• Average lot size £0.756m (2007: £0.358m);

• 1,649,350 shares bought by the Company for cancellation at 70p each

Raymond Lipman, Chairman of Safeland Plc, said:  

'Conditions continue to be difficult. However, we have the support of our bankers and our professionals and I therefore look to the future with confidence.'

SAFELAND PLC

16 June 2008

Chairman's Statement

For the year ended 31 March 2008 the group has made a loss before tax from continuing operations of £977,000 compared to a profit for the previous year of £3,228,000 (restated to exclude discontinued operations). The resultant loss per share from continuing operations is 3.92p (2007 earnings per share: restated 12.68p).

As a result of current market conditions the board together with assistance from an external valuer examined its property portfolio as at the year end and took the decision to make write downs amounting to £1,463,000 which are included in the loss referred to above.

On a comparable property trading basis, ignoring the write downs and the profits in 2007 that emanated from share disposals, Safeland made a profit in the year under review of £486,000 compared to a £344,000 loss in the previous year.

During the year to 31 March 2008 the group undertook 29 transactions compared to 51 in the previous year with an average lot size of £756,000 (2007: £358,000). Revenue for the year was £23,567,000 compared to £21,472,000 in the prior year. Gearing at the year end was 110% (2007: 117%). Net assets per share were maintained at 114p due to the purchase of 1,649,350 shares by the Company for cancellation at 70p each during the year.

As I mentioned in my statement in the interim results, it was decided to cease involvement in Espazio, the Italian self storage company, which accordingly was placed into voluntary liquidation on 1 October 2007. I can advise shareholders that the freehold property in Rome was sold in April 2008 and Espazio also ceased trading from the property in Milan. It is expected that all outstanding matters will be finalised during the first half of the current financial year.

Shareholders will be aware that we have been involved in a managed workspace fund for the last 18 months. A conscious decision was taken to refrain from its expansion until the property market settles down and, accordingly its assets under management have only grown to £61m compared to £50m in the previous year.  

Shareholders may be aware from a recent announcement that our two long standing non-executive directors Leonard Green and Richard Pryce are retiring from the board as of 30 June 2008. I would like to take this opportunity of thanking them for their sterling efforts over many years and wish them well for the future.

At the same time I am delighted that Edward Young will be joining the board as of that date as a non-executive director. I am looking forward to his contribution bearing in mind his experience both as a lawyer and as a non-executive director on the boards of other companies.

Conditions continue to be difficult. However, we have the support of our bankers and our professionals and I therefore look to the future with confidence.

Raymond Lipman

Chairman

13 June 2008

CONSOLIDATED INCOME STATEMENT

Year ended 31 March 2008

	Note	2008 £'000	2007 Restated £'000
		Unaudited	Audited
Revenue	2	23,567	21,472
Cost of sales		(19,339)	(17,727)
Gross profit		4,228	3,745
Sales and distribution costs		(573)	(370)
Administrative expenses		(4,022)	(3,944)
Other operating income		855	326
(Loss) / profit on disposal of property, plant and equipment		(4)	29
Gains on revaluation of investment properties		287	-
Profit on disposal of investment properties		105	156
Operating profit / (loss)		876	(58)
Share of results of associates - post tax		-	(4)
Impairment of interests in associates		(10)	-
Profit on disposal of available-for-sale investments		-	3,572
Profit before interest		866	3,510
Finance income		81	139
Finance costs		(1,924)	(421)
(Loss) / profit  before tax	2	(977)	3,228
Tax		267	(882)
(Loss) / profit for the financial year from continuing operations		(710)	2,346
(Loss) / profit for the period from discontinued operations	3	(83)	463
(Loss) / profit for the financial year		(793)	2,809

CONSOLIDATED INCOME STATEMENT

Year ended 31 March 2008

		2008	2007 Restated
		Unaudited	Audited
(Loss) / earnings per share
Continuing operations
Basic (loss) / earnings per share	4	(3.92)p	12.68p
Diluted (loss) / earnings per share		(3.92)p	12.67p
Continuing and discontinued operations
Basic (loss) / earnings per share		(4.38)p	15.18p
Diluted (loss) / earnings per share		(4.38)p	15.17p

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

Year ended 31 March 2008

		Note	2008 £'000	2007 £'000
			Unaudited	Audited
Fair value (losses) / gains on available-for-sale investments			(102)	18
Exchange differences on translation of foreign operations			(38)	43
Tax on items taken directly to equity			30	(5)
Transfer to profit on sale of available-for-sale investments			-	(3,053)
Transfer foreign currency translation reserve to income statement			45	-
Tax on items transferred from equity			-	751
Net (loss) recognised directly in equity			(65)	(2,246)
(Loss) / profit for the year			(793)	2,809
Total recognised income and expense for the year attributable to equity shareholders		7	(858)	563

CONSOLIDATED BALANCE SHEET

31 March 2008

	Note	2008 £'000	2007 £'000
		Unaudited	Audited
Non-current assets
Property, plant and equipment		2,177	4,263
Investment properties		2,054	1,868
Interests in associates		-	10
Available-for-sale investments		1,089	1,191
Deferred tax assets		104	46
Total non-current assets		5,424	7,378
Current assets
Trading properties		33,390	38,753
Trade and other receivables		2,657	2,363
Current tax receivable		283	-
Cash and cash equivalents	6	813	1,448
Total current assets		37,143	42,564
Total assets		42,567	49,942
Current liabilities
Bank loans and overdrafts		19,679	8,089
Trade and other payables		1,255	2,051
Current tax liabilities		-	541
Total current liabilities		20,934	10,681
Non-current liabilities
Bank loans		2,301	18,040
Deferred tax liabilities		146	103
Total non-current liabilities		2,447	18,143
Total liabilities		23,381	28,824
Net assets		19,186	21,118
Equity
Share capital		843	925
Share premium account		5,351	5,351
Capital redemption reserve		847	765
Share based payment reserve		86	-
Translation reserve		-	(7)
Investment revaluation reserve		13	85
Retained earnings		12,046	13,999
Total equity	7	19,186	21,118

CONSOLIDATED CASH FLOW STATEMENT

Year Ended 31 March 2008

		Note		2008 £'000	2007 Restated £'000
				Unaudited	Audited
Operating activities
Net cash inflow / (outflow) from operations		5		6,724	(22,575)
Interest paid				(1,924)	(481)
Tax paid				(542)	(728)
Net cash inflow / (outflow) from operating activities				4,258	(23,784)
Investing activities
Interest received				81	140
Purchase of investment properties				(761)	(776)
Purchase of property, plant and equipment				(482)	(518)
Purchase of available-for-sale investments				-	(1,000)
Proceeds from sale of property, plant and equipment				278	2,947
Proceeds from sale of investment properties				967	3,696
Proceeds from sale of available for sale investments				-	6,890
Cash outflows in respect of subsidiary in voluntary liquidation				(358)	-
Net cash (outflow) / inflow from investing activities				(275)	11,379
Financing activities
New loans				19,140	21,513
Loan repayments				(23,330)	(9,306)
Purchase of own shares				(1,160)	-
Net cash (outflow) / inflow from financing activities				(5,350)	12,207
Net decrease in cash and cash equivalents in the year				(1,367)	(198)
Cash and cash equivalents at beginning of year				1,349	1,547
Cash and cash equivalents at end of year		6		(18)	1,349

NOTES TO THE PRELIMINARY ANNOUNCEMENT

Year ended 31 March 2008

1.    BASIS OF PREPARATION

The financial information set out in the announcement does not constitute the group's statutory financial statements within the meaning of section 240 of the Companies Act 1985, for the years ended 31 March 2008 or 2007. The statutory financial statements for the year ended 31 March 2008 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 2007 is derived from the statutory accounts for that year.  The auditor reported on those statutory accounts which have been delivered to the Registrar of Companies. The audit report was unqualified and did not contain a statement under s237(2) or (3) of the Companies Act 1985.

This announcement is prepared applying International Financial Reporting Standards as adopted by the European Union and using accounting policies that are consistent with those as stated in the previous year's financial statements. 

This preliminary announcement was approved by the Board of directors on 13 June 2008.

Copies of this announcement are available from the company's registered office at 94-96 Great North Road, London, N2 0NL and on its website, www.safeland.co.uk. The Annual Report and Accounts will be sent to shareholders shortly.

2.    BUSINESS AND GEOGRAPHICAL SEGMENTS

Business segments 

For management purposes, the group was organised into three operating divisions as detailed below:

• property trading, property refurbishment and property investment

• property fund management; and

• self storage

These divisions are the basis on which the group reports its primary segmental information.

The group's self storage subsidiary was placed into voluntary liquidation on 1 October 2007 and this segment has been disclosed as a discontinued operation.

Geographical segments

The group's operations are wholly based in the United Kingdom except the self-storage operation which operated in Italy and was placed into voluntary liquidation on 1 October 2007.

No additional segmental disclosure is provided in respect of geographical segments as they are identical to the business segments detailed above.

Year ended 31 March 2008		Property trading, refurbishment and investment		Self storage		Fund management			Discontinued operations	Total
		£'000		£'000		£'000			£'000	£'000
Revenue		23,136		225		431			(225)	23,567
Segment result		1,353		(52)		(477)			52	876
Impairment of interests in associates										(10)
Finance income										81
Finance costs										(1,924)
Loss before tax										(977)
Tax										267
Loss for the year from discontinued operations										(83)
Loss  for the financial year										(793)
Other information
Capital expenditure		1,208		12		23				1,243
Depreciation		164		-		28				192
Share based payment		-		-		86				86
Balance sheet
Segment assets		38,044		1,593		1,454				41,091
Available-for-sale investments										1,089
Deferred tax asset										104
Current tax receivable										283
Total assets										42,567
Segment liabilities		1,095		-		160				1,255
Borrowings										21,980
Deferred tax liabilities										146
Total liabilities										23,381
Year ended 31 March 2007 restated	Property trading, refurbishment and investment				Self storage		Fund management	Discontinued operations		Total
	£'000		£'000				£'000	£'000		£'000
Revenue	21,353		438				119	(438)		21,472
Segment result	7		506				(65)	(506)		(58)
Share of result of associates - post tax										(4)
Profit on disposal of available-for-sale investments										3,572
Finance income										139
Finance costs										(421)
Profit before tax										3,228
Tax										(882)
Profit for the year from discontinued operations										463
Profit for the financial year										2,809
Other information
Capital expenditure	1,162		22				110			1,294
Depreciation	163		172				7			342
Balance sheet
Segment assets	45,004		2,361				1,330			48,695
Interests in associates										10
Available-for-sale investments										1,191
Deferred tax asset										46
Total assets										49,942
Segment liabilities	1,615		355				81			2,051
Borrowings										26,129
Current tax liabilities										541
Deferred tax liabilities										103
Total liabilities										28,824

3.    DISCONTINUED OPERATIONS

On 1 October 2007, the Group's subsidiary, Espazio SRL was placed into voluntary liquidation and hence all assets and liabilities were deemed to be disposed of on this date. This subsidiary carried out the Group's self storage business. The results of the discontinued operations which have been included within the consolidated income statement, were as follows:

	2008 £'000	2007 £'000
Revenue	225	438
Expenses	(277)	(842)
Profit on disposal of property, plant and equipment	-	910
Finance costs (net)	(28)	(43)
(Loss) / profit before tax	(80)	463
Foreign currency translation reserve	(45)	-
Profit on disposal of discontinued operations	42	-
(Loss) / profit attributable to discontinued operations	(83)	463

Basic (loss) / earnings per share	(0.46)p	2.50p
Diluted (loss) / earnings per share	(0.46)p	2.50p

The net assets of Espazio SRL at the date of disposal and at the end of the comparative year were as follows:

	1 October 2007 £'000	31 March 2007 £'000
Property, plant and equipment	2,094	2,082
Trade and other receivables	163	162
Cash and cash equivalents	30	117
Bank loan	(691)	(741)
Trade and other payables	(373)	(355)
Loan from Safeland plc to Espazio SRL	(2,718)	(2,646)
	(1,495)	(1,381)
Add: loan from Safeland plc to Espazio SRL	2,718	2,646
Net assets (excluding loan from Safeland plc to Espazio SRL)	1,223	1,265
Profit arising on voluntary liquidation of subsidiary	42
Total estimated cash consideration	1,265

The total estimated cash consideration comprises the directors' estimate of balance of the loan from Safeland plc to Espazio SRL of £2,718,000 that will be recoverable from the liquidator. During the period from 1 October 2007 to 31 March 2008 there was a net advance from the company of £328,000 and subsequent to the year end there has been cash inflows totalling £1,278,000. The directors estimate the balance of the estimated cash consideration of £315,000 will be received during the year ending 31 March 2009.

4.    (LOSS) / EARNINGS PER SHARE

The calculation of the basic and diluted (loss) / earnings per share is based on the following data:

	2008 £'000	2007 £'000
	Unaudited	Audited
(Loss) / profit for the year from continuing operations	(710)	2,346
(Loss) / profit for the year from discontinued operations	(83)	463
(Loss) / profit for the year attributable to equity holders of the company	(793)	2,809
	2008 '000	2007 '000
	Unaudited	Audited
Weighted average number of ordinary shares for the purposes of basic (loss) / earnings per share	18,122	18,501
Effect of dilutive potential ordinary shares	-	14
Weighted average number of ordinary shares for the purposes of diluted (loss) / earnings per share	18,122	18,515

There is no dilutive effect of potential ordinary shares in 2008 as there is a loss for the year. The dilution in 2007 arises from the effect of share options.

5.    NOTES TO THE CASH FLOW STATEMENT

	2008 £'000	2007 restated £'000
	Unaudited	Audited
(Loss) / profit before tax from continuing operations	(977)	3,228
(Loss) / profit before tax from discontinued operations	(83)	463
Adjustments for:
Depreciation of property, plant and equipment	192	342
Loss / (profit) on sale of property, plant and equipment	4	(939)
Profit on sale of investment properties	(105)	(156)
Gains on revaluation of investment properties	(287)	-
Profit on sale of available-for-sale investments	-	(3,572)
Share of results of associates	-	4
Impairment of interests in associates	10	-
Share based payment charge	86	-
Finance costs (net)	1,871	325
Changes in working capital:
Decrease / (increase) in trading properties	5,363	(22,366)
Decrease / (increase) in trade and other receivables	1,136	(955)
(Decrease) / increase in trade and other payables	(486)	1,051
Net cash inflow / (outflow) from operations	6,724	(22,575)

6.    CASH AND CASH EQUIVALENTS 

	2008 £'000	2007 £'000
	Unaudited	Audited
Cash and cash equivalents per balance sheet	813	1,448
Bank overdrafts	(831)	(99)
Cash and cash equivalents per cash flow statement	(18)	1,349

All of the group's cash and cash equivalents at 31 March 2008 are at floating interest rates except for cash held in non-interest bearing accounts of £4,000 (2007: £7,000).

All of the group's cash and cash equivalents at 31 March 2008 are in sterling except for £Nil (2007: £117,000) held in Euros.

The directors consider that the carrying amount of cash and cash equivalents approximates their fair value.

7.    STATEMENT OF CHANGES IN EQUITY 

	2008 £'000	2007 £'000
	Unaudited	Audited
1 April 2007	21,118	20,555
Total recognised income and expense for the year	(858)	563
Purchase of own shares	(1,160)	-
Share based payment charge	86	-
31 March 2008	19,186	21,118

 

END

 

 

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