Final Results
Safeland PLC
20 June 2005
SAFELAND PLC
YEAR ENDED 31 MARCH 2005
CHAIRMAN'S STATEMENT
I am delighted to report a profit before tax of £2,426,000 (2004: loss
£1,037,000) and the resultant earnings per share of 9.38p (2004: loss 5.37p).
The profit as reported above constitutes a number of items that I should report
to you. As I mentioned in my interim in November 2004, Safeland Plc took
advantage of the offer that was made by Erinaceous Plc for the entire share
capital of Hercules Property Services Plc, and as a result we have sold our
entire shareholding for a profit of £1.2m. Also during this year the provision
that was made in 2003 against the then value of the shares in Bizspace Plc
amounting to £716,000 has been written back, bearing in mind the success of that
company and the share price which currently stands at 58p, thus reinstating the
value of these shares at their original cost. The self storage business
situated in Italy continues to produce losses which for this year amount to
£628,000.
The profit, after eliminating the above and the loss before tax of our associate
of £43,000, with regard to property trading and the sale of investment
properties amounts to £1,180,000 which is an extremely satisfying result bearing
in mind the continued challenging conditions of our current property market.
Gearing at the year end stands at 55% (2004: 76%) and it is not the intention of
the company to pay a cash dividend at this time. In March 2005, however,
Safeland announced a demerger of seven unquoted vehicles whose shares were
distributed as a dividend in specie to our shareholders, three of which, namely,
Sagittarius Professional Services Plc, Taurus Storage Plc, Libra Retail Plc,
were subsequently admitted to trading on the AIM.
During the year the company purchased 1,260,000 of its own shares which
contributed to an increase in a net asset value per share at the year end of
£1.05p compared to 94p in March 2004.
In addition during the year under review, Safeland undertook 60 property
transactions compared with 85 in the previous year, with an average lot size of
£472,000 (2004: £230,000). Turnover for the current year is £28,309,000
compared to £19,448,000 in the year ended 31 March 2004.
Apart from property trading this has been an extremely eventful 12 months with
not only the sale of the Hercules Property Services Plc stake, but also in
January 2005 a company now called Service Office Group Plc reversed into tecc-Is
Plc, the AIM listed company in which Safeland now holds a 12.5% stake. We are
very comfortable with this investment as we are with our holding in Bizspace
Plc.
We continue to monitor the market very closely and remain in a very strong
position to take advantage of opportunities as they become available.
Raymond Lipman
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 March 2005
Note 2005 2004
£'000 £'000
Unaudited Audited
Turnover
Group and share of joint venture 28,456 20,764
Less: share of joint venture (147) (1,316)
Group turnover 2 28,309 19,448
Cost of sales (23,922) (16,893)
Gross profit 4,387 2,555
Sales and distribution expenses (625) (546)
Administrative expenses (3,477) (3,821)
Other operating income 333 209
Group operating profit/(loss) 618 (1,603)
Share of operating profit of joint ventures 3 43 771
Share of operating loss of associate (71) (98)
Total operating profit/(loss) 590 (930)
Profit on disposal of fixed assets - investment properties 476 171
Profit on disposal of investments 1,201 109
Profit on disposal of subsidiaries 4 1 255
Profit/(loss) on ordinary activities before interest and taxation 2,268 (395)
Interest receivable and similar income 5 262 304
Share of amounts written off investments of associate - (261)
Write back amounts previously written off investments 716 -
Interest payable and similar charges 6 (820) (685)
Profit/(loss) on ordinary activities before taxation 2,426 (1,037)
Tax charge on profit/(loss) on ordinary activities (624) (77)
Profit/(loss) on ordinary activities after taxation 1,802 (1,114)
Equity dividends 7 (322) -
Retained profit/(loss) for the financial year 1,480 (1,114)
Basic and diluted earnings/(loss) per share 8 9.38p (5.37p)
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 31 March 2005
2005 2004
£'000 £'000
Unaudited Audited
Profit/(loss) for the financial year 1,802 (1,114)
Unrealised surplus on revaluation of investment properties 99 1,323
Taxation on valuation surplus realised on sale of investment properties (38) (110)
Currency translation differences of foreign currency net investments (27) 31
Total recognised gains and losses for the year 1,836 130
NOTE OF HISTORICAL COST PROFITS AND LOSSES
2005 2004
£'000 £'000
Unaudited Audited
Profit/(loss) on ordinary activities before taxation 2,426 (1,037)
Realisation of property revaluation gains of earlier years 181 412
Historical cost profit/(loss) on ordinary activities before taxation 2,607 (625)
Historical cost profit/(loss) retained for the year after taxation and dividends 1,623 (812)
CONSOLIDATED BALANCE SHEET
31 March 2005
Note 2005 2004
£'000 £'000
Unaudited Audited
Fixed assets
Intangible assets - goodwill - -
Tangible assets 5,940 5,748
Investment properties 4,305 3,981
Investment in joint ventures
Share of gross assets 4,473 4,649
Share of gross liabilities (488) (627)
3,985 4,022
Investment in associate - 661
Other investments 3,238 3,926
17,468 18,338
Current assets
Stocks 11,543 13,409
Debtors 3,493 2,649
Cash at bank and in hand 2,226 2,212
17,262 18,270
Creditors: amounts falling due within one year (5,565) (4,385)
Net current assets 11,697 13,885
Total assets less current liabilities 29,165 32,223
Creditors: amounts falling due after more than one year (9,762) (13,624)
19,403 18,599
Capital and reserves
Called up equity share capital 925 985
Share premium account 5,351 5,304
Capital redemption reserve 765 702
Investment property revaluation reserve 1,415 1,497
Profit and loss account 10,947 10,111
Equity shareholders' funds 13 19,403 18,599
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March 2005
Note 2005 2004
£'000 £'000
Unaudited Audited
Net cash inflow/(outflow) from operating activities 9 1,477 (8,452)
Returns on investment and servicing of finance 10 (506) (318)
Taxation 107 (843)
Capital expenditure and financial investment 10 3,065 (393)
Acquisitions and disposals 10 52 631
Cash inflow/(outflow) before financing 4,195 (9,375)
Financing 10 (3,627) 6,240
Increase/(decrease) in cash 568 (3,135)
NOTES TO THE PRELIMINARY ANNOUNCEMENT
Year ended 31 March 2005
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 2005 or 2004.
The statutory financial statements for the year ended 31 March 2005 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
results for the year ended 31 March 2004 have been extracted from the full
statutory financial statements 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 20
June 2005.
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
2005 2004
£'000 £'000
Unaudited Audited
Group turnover
Property trading and refurbishment 28,024 19,116
Investment properties 92 111
Self storage 193 221
28,309 19,448
Profit/(loss) on ordinary activities before taxation
Property trading and refurbishment 626 (398)
Investment properties 554 211
Self storage (628) (639)
Tecc-IS (associate) (43) (320)
Profit on disposal of investments 1,201 109
Write back amounts previously written off investments 716 -
2,426 (1,037)
Net assets
Property trading and refurbishment 13,380 11,753
Investment properties 3,867 3,939
Self storage 2,156 2,246
Tecc-IS (associate) - 661
19,403 18,599
All turnover (by origin and destination), 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, Tecc-IS plc, the associated
undertaking, which operates mainly in Israel and the results and net assets
of the Brackdale joint venture, which operated in South Africa and
contributed £nil (2004: £60,000) to profit before taxation in the year and
£nil (2004: £nil) to net assets. The residential property and Brackdale
joint ventures are reported within property trading and refurbishment.
3. SHARE OF OPERATING PROFIT OF JOINT VENTURE
Share of operating profit of joint venture relates to our residential
property joint venture.
4. PROFIT ON DISPOSAL OF SUBSIDIARIES
Eight wholly-owned subsidiaries of Safeland plc were disposed of during the
year: Pink Affinity Limited was sold and Pisces Property Services Plc,
Sagittarius Professional Services Plc, Aries Insurance Services Plc, Libra
Retail Plc, Taurus Storage Plc, Secure Ventures (No 6) Plc and Secure
Ventures (No 7) Plc ('demerged subsidiaries') were all demerged. None of
the subsidiary undertakings disposed of contributed any pre-tax results to
the group in the year (2004: £nil).
The following table sets out the book value of assets and liabilities
disposed.
Pink Affinity Limited Demerged subsidiaries
£'000 £'000
Stocks 409 -
Cash at bank and in hand - 358
Net assets 409 358
Profit on disposal 1 -
Retention of minority interest - (36)
410 322
Satisfied by: 410 -
Cash
Dividend in specie - 322
410 322
5. INTEREST RECEIVABLE AND SIMILAR INCOME
2005 2004
£'000 £'000
Unaudited Audited
Income from fixed asset investments 49 94
Bank deposit interest 53 64
Interest on late completion of contracts 14 29
Interest from joint venture 79 41
Other interest receivable 36 26
Group interest receivable 231 254
Share of joint ventures' interest receivable 3 11
Share of associate's interest receivable 28 39
262 304
6. INTEREST PAYABLE AND SIMILAR CHARGES
2005 2004
£'000 £'000
Unaudited Audited
Interest on bank overdrafts and loans 733 569
Other interest payable 4 3
Group interest payable 737 572
Share of joint ventures' interest payable 83 113
820 685
7. EQUITY DIVIDENDS
As explained in note 4, the company demerged seven subsidiaries by the
payment of a dividend in specie representing 90% of the ordinary share
capital of each company. No interim cash dividend has been paid or final
dividend declared in either year.
8. EARNINGS/(LOSS) PER SHARE
Basic and diluted earnings/(loss) per share of 9.38p (2004: loss of 5.37p)
are based on the profit for the financial year of £1,802,000 (2004: loss of
£1,114,000) and on 19,207,059 ordinary shares (2004: 20,754,333 ordinary
shares) being the weighted average number of shares in issue throughout the
year.
The calculation of diluted earnings/(loss) per share uses the same
earnings/(loss) figure and weighted average number of shares as the basic
calculation, as the exercise value of all share options was higher than the
average share price during the period to date of exercise.
9. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES
2005 2004
£'000 £'000
Unaudited Audited
Operating profit/(loss) 618 (1,603)
Amortisation of goodwill - 100
Depreciation 269 322
Amounts written off investment properties - 59
(Profit)/loss on sale of fixed assets (16) 42
Decrease/(increase) in stocks 1,457 (8,850)
(Increase)/decrease in debtors (1,264) 1,451
Increase in creditors 413 27
Net cash inflow/(outflow) from operating activities 1,477 (8,452)
10. ANALYSIS OF CASH FLOWS
2005 2004
£'000 £'000
Unaudited Audited
Returns on investment and servicing of finance
Interest received 182 160
Interest paid (737) (572)
Dividends received 49 94
(506) (318)
Capital expenditure and financial investment
Purchase of tangible fixed assets (660) (1,463)
Purchase of investment properties (1,689) (742)
Disposal of tangible fixed assets 215 344
Disposal of investment properties 1,940 1,004
Disposal of investments 3,259 464
3,065 (393)
Acquisitions and disposals
Purchase of subsidiary undertaking (net of £12,000 cash acquired) - (88)
Purchase of investment in associate - (981)
Sale of subsidiary undertaking 410 1,700
Net cash balances demerged with subsidiaries (358) -
52 631
Financing
Proceeds from share issue 50 -
Purchase of own shares (760) (675)
Loan repayments (20,311) (1,184)
New loans 17,394 8,099
(3,627) 6,240
11. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2005 2004
£'000 £'000
Unaudited Audited
Increase/(decrease) in cash in the year 568 (3,135)
Cash outflow/(inflow) from decrease/(increase) in debt 2,917 (6,915)
Change in net debt resulting from cash flows 3,485 (10,050)
Net debt brought forward (11,834) (1,784)
Net debt carried forward (8,349) (11,834)
12. ANALYSIS OF NET DEBT
At At
31 March 2004 Cash flows 31 March 2005
£'000 £'000 £'000
Audited Unaudited Unaudited
Cash at bank and in hand 2,212 14 2,226
Bank overdrafts (564) 554 (10)
1,648 568 2,216
Debt due within one year (660) (143) (803)
Debt due after one year (12,822) 3,060 (9,762)
(11,834) 3,485 (8,349)
13. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
2005 2004
£'000 £'000
Unaudited Audited
Profit/(loss) for the financial year 1,480 (1,114)
Other recognised gains and losses in the year 34 1,244
Goodwill previously written off to reserves - 95
Shares issued in year 50 -
Repurchase of shares (760) (675)
Net increase/(reduction) in equity shareholders' funds 804 (450)
Opening equity shareholders' funds 18,599 19,049
Closing equity shareholders' funds 19,403 18,599
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