Final Results

RNS Number : 4509P

Safeland PLC

19 August 2014

 



19 August 2014

Safeland Plc

("Safeland" or the "Company")

Audited final results for the year end 31 March 2014

Chairman's Statement

Key achievements

This year has seen significant progress enabling Safeland to make a distribution to its shareholders. As a result of the capital restructuring of reserves announced on 13 March 2014 and the subsequent demerger of the Safestay joint venture on 2 May 2014, Safeland was then able to make its first distribution to shareholders in over a decade.

We have made significant progress with our existing developments and we were able to acquire additional sites in the year which we anticipate will generate future positive returns. Most notably, the planning application for the Chandos Tennis Club in Golders Green has progressed. On 13 February 2014, the London Borough of Barnet passed a resolution to grant planning permission for the development of housing on this site. This was a significant step towards obtaining unconditional planning consent. On 14 May 2014, Safeland also announced that pursuant to the terms of a conditional sales contract with a prominent house builder to develop the site, it would be entitled to receive approximately £13.2 million in staged payments over the next few years, which the directors estimate to be approximately three years, plus potential additional overage revenues.

We were also pleased to announce that we had obtained a residential consent under permitted development rights in relation to part of a property in Wimbledon which was acquired by the Group in 2013. The intention is that the property will be converted into 31 residential units for onward sale.

Financial Review

Net asset value per share up 11% at 63p (2013: 57p)

Total shareholder return was 86.7% (2013: 6.1%)

The Group's revenue in the year to 31 March 2014 of £10.41m (2013 £8.59m) comprises the sales of development properties, rental income, management fees and the hotel operation purchased in the year. This is an increase of 21% resulting in increased operating profit for the year ended 31 March 2014 of £1.31m (2013 £0.50m).

The demerger of the Safestay joint venture on 2 May 2014 enabled Safeland to distribute the shares it received from Safestay plc by way of a dividend in specie, equivalent to 10.73p per Safeland share. The directors do not recommend the payment of a final dividend.

We have increased the value of trading stock over the year by £2.6m to £12.5m as at 31 March 2014 and, as a result, the statement of financial position has gearing of 69% as at that date (2013: 65%).

Outlook

The Group is now poised to complete a number of developments which should ensure that the near term outlook for shareholder returns is at its strongest for some considerable time.

Ray Lipman

Chairman

19 August 2014

Consolidated Income Statement

Year ended 31 March 2014

	Note		2014 £'000	2013 £'000
Revenue			10,408	8,587
Cost of sales			(8,269)	(7,106)
Gross profit			2,139	1,481
Administrative expenses			(1,458)	(1,677)
Gain on revaluation of investment properties			325	225
Share of profit of joint controlled entity			252	446
Share of results of associate			53	20
Operating profit			1,311	495
Exceptional profit arising from misappropriation of funds			-	809
Finance income			1	2
Finance costs			(409)	(278)
Profit before tax			903	1,028
Tax			(93)	132
Profit for the financial year attributable to owners of the parent company			810	1,160
Basic earnings per share	2		4.81p	6.88p
Diluted earnings per share	2		3.17p	6.79p

The revenue and operating result for the year is derived from continuing operations in the United Kingdom.

Consolidated Statement of Comprehensive Income

Year ended 31 March 2014

					2014 £'000	2013 £'000
Profit for the year					810	1,160
Other comprehensive income
Fair value losses on available for sale financial assets					-	(2)
Other comprehensive income for the year, net of tax					-	(2)
Total comprehensive income for the year                                                                     attributable to owners of the parent company					810	1,158

Consolidated Statement of Financial Position

31 March 2014

	Note	2014 £'000	2013 £'000
Non-current assets
Property, plant and equipment		151	133
Investment properties	3	5,343	5,018
Investments in jointly controlled entity		698	446
Investment in associate		126	103
Available-for-sale investments		50	50
Total non-current assets		6,368	5,750
Current assets
Trading properties	4	12,483	9,864
Trade and other receivables		1,509	1,731
Cash and cash equivalents		1,003	712
Total current assets		14,995	12,307
Total assets		21,363	18,057
Current liabilities
Trade and other payables Derivative financial instruments		1,633 3	750 10
Total current liabilities		1,636	760
Non-current liabilities
Bank loans		8,400	6,878
Deferred income tax liabilities		717	756
Total non-current liabilities		9,117	7,634
Total liabilities		10,753	8,394
Net assets		10,610	9,663
Equity
Share capital		843	843
Share premium account		-	5,351
Capital redemption reserve		-	847
Share based payment reserve		348	211
Investment revaluation reserve		5	5
Retained earnings		9,414	2,406
Total equity attributable to owners of the parent company		10,610	9,663

These financial statements were approved by the Board of Directors and authorised for issue on 19 August 2014.

Signed on behalf of the Board of Directors

Raymond Lipman                                                                                             Colin Stone                                                                       

Consolidated Statement of Changes in Equity

31 March 2014

	Share Capital £'000			Share premium account £'000			Capital redemption reserve £'000			Share based payment reserve £'000		Investment revaluation reserve £'000			Retained earnings £'000			Total equity £'000
Balance at 1 April 2013	843			5,351			847			211		5			2,406			9,663
Comprehensive income
Profit for the year	-			-			-			-		-			810			810
Total comprehensive income			-			-			-		-			-		810			810
Transactions with owners
Capital reduction	-			(5,351)			(847)			-		-			6,198			-
Share based payment charge for the year	-				-			-		137			-				-		137
Balance at 31 March 2014	843				-			-		348			5				9,414		10,610

	Share Capital £'000			Share premium account £'000			Capital redemption reserve £'000			Share based payment reserve £'000		Investment revaluation reserve £'000			Retained earnings £'000			Total equity £'000
Balance at 1 April 2012 (as restated)	843			5,351			847			73		7			1,246			8,367
Comprehensive income
Profit for the year	-			-			-			-		-			1,160			1,160
Fair value losses on available-for-sale investments			-			-			-		-			(2)		-			(2)
Total comprehensive income			-			-			-		-			(2)		1,160			1,158
Transactions with owners
Share based payment charge for the year	-				-			-		138			-				-		138
Balance at 31 March 2013	843				5,351			847		211			5				2,406		9,663

Consolidated Statement of Cash Flows

Year ended 31 March 2014

	Note	2014 £'000	2013 £'000
Operating activities
Cash (outflow)/generated from operations	5	(787)	648
Interest paid		(416)	(227)
Net cash (outflow)/generated from operating activities		(1,203)	421
Investing activities
Interest received		1	2
Purchase of property, plant and equipment		(115)	(105)
Distributions from associate		30	70
Proceeds from sale of property, plant and equipment		56	179
Net cash (outflow)/generated from investing activities		(28)	146
Financing activities
New loans		8,206	6,878
Loan repayments		(6,684)	(7,190)
Net cash generated/(outflow) from financing activities		1,522	(312)
Net increase in cash and cash equivalents		291	255
Cash and cash equivalents at beginning of year		712	457
Cash and cash equivalents at end of year		1,003	712

Notes to the company accounts

31 March 2014

 

1.        BASIS OF PREPARATIOn

On 19 August 2014, the Directors approved this preliminary announcement for publication. Copies of this announcement are available from the Company's registered office at 1a Kingsley Way, London, N2 0FW and on its website, www.safeland.co.uk. The Annual Report and Accounts will be sent to shareholders in due course and will be available on the Company's website, www.safeland.co.uk.The financial information presented above does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006 for the years ended 31 March 2014 or 31 March 2013.

The financial information for the year ended 31 March 2014 is derived from the statutory financial statements for that year, prepared under IFRS, upon which the auditors have reported. The audit report was unqualified, did not include references to matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.  The statutory financial statements for the year ended 31 March 2014 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

The financial information for the year ended 31 March 2013 is derived from the statutory financial statements for that year, prepared under IFRS, upon which the auditors have reported and have been filed with the Registrar of Companies. The audit report was unqualified, did not include references to matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The accounting policies applied in this announcement are consistent with those of the annual financial statements for the year ended 31 March 2013, as described in those annual financial statements.

2.         Earnings per share

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

		2014          £'000	2013          £'000
Profit for the year attributable to equity holders of the company		810	1,160

		2014           '000	2013           '000
Weighted average number of ordinary shares for the purposes of basic earnings per share		16,851	16,851
Effect of dilutive potential ordinary shares		8,693	214
Weighted average number of ordinary shares for the purposes of diluted earnings per share		25,544	17,065

3.         investment properties

		2014        £'000	2013       £'000
Fair value
At 1 April 2013		5,018	4,793
Increase in fair value during the year		325	225
At 31 March 2014		5,343	5,018

The fair value of the investment properties at 31 March 2014 comprises freehold properties of £4,765,000 (2013: £4,440,000) and long leasehold properties of £578,000 (2013: £578,000).

The leasehold and freehold investment property have been classified within level 3 of the fair value hierarchy (unobservable inputs).

The valuation of the Chandos Tennis club of £4,500,000 (2013: £4,175,000)

The Group has a conditional sales agreement to develop this site. The methodology to value this property is to calculate net present value of the future anticipated contract payments and deduct a percentage for planning risk and to provide for the potential affordable housing obligations which both remain outstanding at 31 March 2014.

31 March 2014 valuation

				£'000	£'000	£'000
£4,500,000				Change in discount rate
				-0.5%	0%	0.5%
		Change in	-5%	5,138	5,038	4,939
		risk rate	0%	4,564	4,500	4,378
			5%	3,990	3,902	3,816

31 March 2013 valuation

				£'000	£'000	£'000
£4,175,000				Change in discount rate
				-0.5%	0%	0.5%
		Change in	-5%	4,847	4,772	4,698
		risk rate	0%	4,254	4,175	4,400
			5%	3,661	3,596	3,532

The remaining investment properties consist of residential property located in North London and have been valued by the Directors. The methodology to value these properties is to compare historical comparable market transactions less a percentage reduction to reflect the limitations of restrictive tenancies. Based on valuations at 31 March 2014, if the percentage reduction was 5% higher or lower and all other variables were held constant, the Group's net profit would increase or decrease by £65,000 (2013: £65,000). 

The directors do not consider the fair value of the Group's lease obligations associated with its long leasehold investment properties to be material to the financial statements.  As a result, no finance lease obligations are included in the statement of financial position at 31 March 2013 or 2014.

The Group has pledged investment properties with a carrying value of £5,323,000 (2013: £4,998,000) to secure banking facilities granted to the Group.

The fair value of the Group's investment properties at 31 March 2014 had been arrived at on the basis of market value as defined in the Apportionment and Valuation Manual of the Royal Institution of Chartered Surveyors. The valuations were performed by:  

		2014          £'000	2013          £'000
External independent valuations
- Cushman & Wakefield		-	4,175
Directors' valuations		5,343	843
		5,343	5,018

4.         TRADING PROPERTIES

	2014         £'000	2013       £'000
Properties for resale	12,483	9,864

The Group has pledged properties for resale with carrying value of £11,103,000 (2013: £7,268,000) to secure banking facilities granted to the Group.

Properties for resale were reviewed for impairment as at 31 March 2014, the Directors are satisfied that no impairment is necessary.

Trading properties are properties acquired or developed and held for sale and are shown at the lower of cost or net realisable value. The cost of trading properties are those costs directly associated with the acquisition and development of a specific site. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and the estimated costs necessary to make the sale.

5.         NOTES TO THE CASH FLOW STATEMENT

		2014         £'000	2013       £'000
Profit before tax		903	1,028
Adjustments for:
Depreciation of property, plant and equipment		50	57
Gain on sale of property, plant and equipment		(9)	(10)
Gains on revaluation of investment properties		(325)	(225)
Finance cost		409	278
Finance income		(1)	(2)
Share based payment charge		137	138
Share of results of jointly controlled entity		(252)	(446)
Share of results of associate		(53)	(20)
Changes in working capital:
(Increase)/decrease in trading properties		(2,619)	363
Decrease/(increase) in trade and other receivables		197	(584)
Increase in trade and other payables		776	71
Cash (outflow)/generated from operations		(787)	648

 

END

 

 

FR DVLFFZVFBBBK