Half Yearly Report

RNS Number : 3117Z
Safeland PLC
10 December 2014
 



SAFELAND PLC

 

UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

 

 

Chairman's statement

I am delighted to report that the six months to 30 September 2014 has seen Safeland plc generate a significant increase in turnover and profit.

 

Headlines

Turnover: £7.76m (2013: £5.03m), up 54.1%

Profit before tax:  £2.2m (2013: £0.2m)

Total shareholder return: 127.6% (2013: 68.0%)

Dividend in specie paid in the period equivalent to 10.73 pence per share (2013: nil)

Net asset value per share: 63.8p (2013: 59.0p, 31 March 2014 63.0p)

 

The six month period has seen the Board focus on realising the increase in value from some of the Group's investments and its portfolio of trading property whilst continuing to identify new opportunities in the London property market.

 

On 2 May 2014, Safeland demerged its Safestay joint venture. Safeland received 3,617,246 shares from Safestay plc, with a market value of £1.808m, generating a profit on sale of its investment in the joint venture for the half year of £209k. Combined with the capital restructuring approved by shareholders on 20 February 2014, Safeland made a distribution to shareholders by way of a dividend in specie of the Safestay plc shares it had received. The market value of the Safestay plc shares was the equivalent of a cash dividend of 10.73 pence per share.

 

On 4 November 2014, Safeland announced that it had completed the sale of 31 residential units in Wimbledon for £10.23m. Construction of these flats is due to be completed in two stages in February 2015 and June 2015.

 

On 7 November 2014, Safeland announced that following the granting of a planning consent, it had completed the sale of the Chandos Tennis club to a prominent housebuilder who intends develop the site. The consideration payable comprised £4.0 million in cash, which has been received. The balance will be satisfied by way of the transfer to Safeland of four detached houses (valued by the Company's directors in aggregate at £9.2 million) in the completed development anticipated by the summer of 2017. The cash consideration received was used to redeem bank debt secured on the property. The Group is also entitled to overage payments from the sale of the residential units once developed. 

 

On 9 December 2014, the Board renewed its £12.5m credit facility with its principal bankers, Lloyds, for a further 3 years.

 

Outlook

The property market remains stable but could be affected by interest rate changes and global economic events. Notwithstanding this, the Board believes that it has the skills necessary, and the resources available, to make the opportunistic acquisitions and sales that generate shareholder return.

 

Raymond Lipman

Chairman

 

Contacts:

Larry Lipman, Managing Director, Safeland Plc: 020 8815 1600

Tom Griffiths, Westhouse Securities Limited: 020 7601 6100

 

Safeland Plc

Condensed consolidated income statement

Unaudited

Six months

Unaudited

Six months

Audited

Year

 

 

ended

ended

ended

 

 

30 September

30 September

31 March

 


2014

2013

2014

 

 

£000

£000

£000

 

 

 

 

 

 

Revenue

7,763

5,029

10,408

 

Cost of sales

(5,315)

(4,003)

(8,269)

 

Gross profit

 

Administrative expenses

(588)

(711)

(1,458)

 

Gain on revaluation of investment properties

225

-

325

 

Share of results of jointly controlled entity

11

58

252

 

Share of results of associate

25

22

53

 

Profit on sale of investment in joint venture

209

-

-

 

Profit on sale of investment property

124

-

-

 

Operating profit

 

Finance income

1

-

1

 

Finance costs

(224)

(180)

(409)

 

Profit before tax

 

Tax

(351)

-

(93)

 

Profit for the financial period attributable to owners of the parent company

1,880

215

810

 

 

 

 

 

 

Basic earnings per share (note 2)

11.15p

1.28p

4.81p

Diluted earnings per share (note 2)

5.12p

0.58p

3.17p

 



 

Safeland plc

Condensed consolidated statement of comprehensive income

Unaudited

Six months

Unaudited

Six months

Audited

Year

 

ended

ended

ended

 

30 September

30 September

31 March

 

2014

2013

2014

 

£000

£000

£000

 

 

 

 

Profit for the period

1,880

215

810

 

 

 

 

Total comprehensive income for the period attributable to owners of the parent company

1,880

215

810

 



 

 

Condensed consolidated statement of

financial position

Unaudited

30 September

Unaudited

30 September

Audited

31 March

 

2014

2013

2014

 

£000

£000

£000

Non-current assets

 

 

 

Property plant and equipment

170

149        

151

Investment properties (note 5)

5,448

5,018        

5,343

Investment in jointly controlled entity

-

504        

698

Investments in associate

151

126        

126

Available-for-sale investments

225

50        

50

 

5,994

5,847        

6,368

Current assets

 

 

 

Trading properties (note 6)

13,098

13,239        

12,483

Trade and other receivables

362

1,308        

1,509

Cash and cash equivalents

2,865

499       

1003

 

16,325

15,046       

14,995

 

 

 

 

Total assets

22,319

20,893        

21,363

 

 

 

 

Current liabilities

 

 

 

Bank loans and overdrafts (note 7)

9,500

-        

-

Trade and other payables

1,287

488        

1,633

Derivative financial instruments

3

2        

3

 

10,790

490        

1,636

Non-current liabilities

 

 

 

Bank loans (note 7)

-

9,700       

8,400

Deferred income tax liabilities

778

756       

717

 

778

10,456       

7,634

 

 

 

 

Total liabilities

11,568

10,946       

10,753

 

 

 

 

Net assets

10,751

9,947       

10,610

 

 

 

 

Equity

 

 

 

Share capital

843

843       

843

Share premium account

-

5,351       

-

Capital redemption reserve

-

847       

-

Share-based payment reserve

417

280       

348

Investment revaluation reserve

5

5       

5

Retained earnings

9,486

2,621       

9,414

Total equity attributable to owners of the parent company

10,751

9,947       

10,610



 

Safeland plc

Condensed consolidated statement of cash flows

Unaudited

Six months

Unaudited

Six months

Audited

Year

 

Ended

ended

ended

 

30 September

30 September

31 March

 

2014

2013

2014

 

£000

£000

£000

Cash flows from operating activities

 

 

 

Cash generated/(utilised) from operations (note 4)

946

(2,819)

(787)

Interest paid

(225)

(189)

(416)

Net cash generated/(utilised) from operating activities

721

(3,008)

(1,203)

 

 

 

 

Cash flows from investing activities

 

 

 

Cash flows from investing activities

1

-

1

Distributions from associate

-

-

30

Purchase of property, plant and equipment

(88)

(41)

(115)

Purchase of available for sale investments

(175)

 

 

Proceeds from sale of investment property

244

-

-

Proceeds from sale of property, plant and equipment

59

14

56

Net cash inflow/(outflow) from investing activities

41

(27)

(28)

 

 

 

 

Cash flows from financing activities

 

 

 

New loans

6,400

2,822

8,206

Loan repayments

(5,300)

-

(6,684)

Net cash inflow from financing activities

1,100

2,822

1,522

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

1,862

(213)

291

Cash and cash equivalents at beginning of period

1,003

712

712

Cash and cash equivalents at end of period

 2,865

499

1,003

 

 


Safeland plc

Share

Share

Capital

Share-based

Investment

Retained

Total

Condensed consolidated statement of changes in

capital

premium

Redemption

payment

revaluation

earnings

equity

Equity

 

account

Reserve

reserve

reserve

 

 

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 1 April 2014

843

-

-

348

5

9,414

10,610

Comprehensive income

 

 

 

 

 

 

 

Profit for the six months period to 30 September 2014

-

-

-

-

-

1,880

1,880

Total comprehensive income

-

-

-

-

-

1,880

1,880

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Dividend

-

-

-

-

-

(1,808)

(1,808)

Share-based payment charge for the period

-

-

-

69

-

-

69

Balance at 30 September 2014

843

-

-

417

5

9,486

10,751

 



 

Safeland plc

Share

Share

Capital

Share-based

Investment

Retained

Total

Condensed consolidated statement of changes in

capital

premium

Redemption

Payment

revaluation

Earnings

Equity

equity

 

account

Reserve

Reserve

reserve

 

 

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 1 April 2013

843

5,351

847

211

5

2,406

9,663

Comprehensive income

 

 

 

 

 

 

 

Profit for the six months period to 30 September 2013

-

-

-

-

-

215

215

Total comprehensive income

-

-

-

-

-

215

215

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Share-based payment charge for the period

-

-

-

69

-

-

69

Balance at 30 September 2013

843

5,351

847

280

5

2,621

9,947

 

 

 

 

 

 

 



 

Safeland plc

Share

Share

Capital

Share-based

Investment

Retained

Total

Condensed consolidated statement of changes in

capital

premium

redemption

Payment

revaluation

earnings

Equity

Equity

 

account

reserve

Reserve

reserve

 

 

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 1 April 2013

843

5,351

847

211

5

2,406

9,663

Comprehensive income

 

 

 

 

 

 

 

Profit for the year to 31 March 2014

-

-

-

-

-

810

810

Total comprehensive income

-

-

-

-

-

810

810

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Capital reduction

-

(5,351)

(847)

-

-

6,198

-

Share-based payment charge for the period

-

-

-

137

-

-

137

Balance at 31 March 2014

843

5,351

847

348

5

9,414

10,610

 

 

 

 

 

 

 

 

 

 

 


1.      Basis of preparation and accounting policies

The condensed interim consolidated financial statements of the Company and its subsidiaries ("the Group") for the six months ended 30 September 2014 ("the period") have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 31 March 2014. This half year statement does not constitute full accounts as defined by Section 434 of the Companies Act 2006

 

These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements, and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 March 2014.

 

2.      Earnings per share

 

Unaudited

Six months

Unaudited

Six months

Audited

Year

 

 

ended

Ended

ended

 

 

30 September

30 September

31 March

 


2014

2013

2014

 

 

£000

£000

£000

Profit for the financial period attributable to owners of the parent company

1,880

215

810

 

 

 

 

 

 

 

No

No

No

 

 

000

000

000

 

Weighted average number of ordinary shares for

 

 

 

 

the purposes of basic earnings per share

16,851

16,851

16,851

 

Effect of potential dilutive ordinary shares:

 

 

 

 

 

share options

19,865

19,865

8,693

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

36,716

17,789

25,544

 

 

 

 

 

 

 

Diluted Earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares.  



 

3.      Dividends

 

On 2 May 2014, the company distributed the Safestay plc shares it received by way of a dividend in specie. Each shareholder received one Safestay plc share for every 4.66 Safeland plc share held. The market value of the Safestay plc shares at the date of the distribution was 50p.

 

No interim dividend has been declared.

 

4.      Cash flows from operating activities

 

 

Unaudited

Six months

Unaudited

Six months

Audited

Year

 

Ended

ended

ended

 

30 September

30 September

31 March

 

2014

2013

2014

 

£000

£000

£000

 

 

 

 

Profit before tax

2,230

215

903

Depreciation

25

18

50

Loss on sale of property, plant and equipment

(15)

(7)

(9)

Gain on revaluation of investment properties

(225) 

-

(325)

Profit on sale of investment in joint venture

(209)

-

-

Profit on sale of investment property

(124)

 

 

Share of results of associate

(25)

(22)

(53)

Share of results of jointly controlled entity

(11)

(58)

(252)

Finance income

(1)

-

(1)

Finance costs

219

180

409

Share-based payments charge

69

 69

137

 

1,933

395

(787)

Changes in working capital

 

 

 

 

 

 

 

Increase in trading properties

(615)

(3,375)

(2,619)

Decrease in trade and other receivables

258

423

197

(Decrease)/increase in trade and other payables

(630)

(262)

776

 

 

 

 

 

946

(2,819)

(787)



 

5.     Investment properties





Unaudited

Six months

Unaudited

Six months

Audited

Year

 


ended

ended

ended

 


30 September

30 September

31 March

 


2014

2013

2014

 


£000

£000

£000

 

Fair value




 

Start of the period

5,343

5,018

5,018

 

Disposals

(120)

-

-

 

Increase in fair value during the period

225

-

-

325

 

End of period

5,448

5,018

5,343

 

 

The fair value of the investment properties at 30 September 2014 comprises freehold properties of £4,990,000 (30 September 2013: £4,440,000 and 31 March 2014: 4,765,000 and long leasehold properties of £458,000 (30 September 2013: £578,000 and 31 March 2014: £578,000).

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 30 September 2014, 30 September 2013 or 31 March 2014.

The Group has pledged investment properties for resale with carrying value of £5,448,000 (30 September 2013: £5,018,000 and 31 March 2014: £5,343,000).

 

On the 7 November 2014, the Chandos Tennis Club was sold. At the 30 September 2014 the carrying value of this property was £4,725,000 (see note 8).

 

 

6.      Trading properties                         


Unaudited

Six months

Unaudited

Six months

Audited

Year


ended

ended

ended


30 September

30 September

31 March


2014

2013

2014


£000

£000

£000





Properties for resale

 

13,098

13,239

12,483

 

The Group has pledged trading properties for resale with carrying value of £11,169,000 (30 September 2013: £13,239,000 and 31 March 2014: £12,483,000).



 

7.     Bank loans and overdrafts





Unaudited

Six months

Unaudited

Six months

Audited

Year

 


ended

ended

ended

 


30 September

30 September

31 March

 


2014

2013

2014

 


£000

£000

£000

 

 

 

 

 

 

Bank loans

 

 

 

 

 

Due within one year

9,500

-

-

 

Due within one to two years

-

9,700

8,400

 

 

9,500

9700

8,400

 

 

 

 

 

 

There were no breaches in bank loan covenants as at 30 September 2014, 30 September 2013 or 31 March 2014.  All of the Group's bank loans and overdrafts disclosed above comprise borrowings in sterling. The bank loans are secured on properties owned by the Group.

 

At 30 September 2014, the loan facility was due to expire on 24 April 2015. On 9 December 2014 the company renewed its loan facility with its principal lender for a three year period ending 8 December 2017.

 

 

8.         Post balance sheet events

 

            The company announced on 7 November 2014 the sale of the Chandos tennis club to a prominent residential developer after planning consent to build residential property at this location was unconditionally granted.

 

            The completion of the sale will be recognised in the second half of the current financial year. At 30 September 2014 the property was valued on the future anticipated proceeds less a deduction for planning risks which were prevalent at that date.

 

 The Group received £4.0m in cash on the completion date and, in addition, a deferred consideration of four residential properties from the developer in exchange for the Tennis club and a second plot of land held in trading stock. This property is anticipated to be completed and transferred to the group in June 2017 where it will be classed as trading property. The Directors have valued this deferred consideration at £9.20m and estimate the net present value to be £7.65m after applying a discount rate of 6.5%. The carrying value of the investment property sold at 30 September 2014 was £4.725m and the trading property was £1.836m. The group is also entitled to overage payments from the onward sale of the residential property sold from this development, although the directors do not anticipate further proceeds at this stage.

 

9.         Copies of this announcement are available on the Company's website www.safeland.co.uk.

 


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