Interim Results

Safeland PLC 20 November 2000 SAFELAND PLC: INTERIM RESULTS FOR SIX MONTHS TO 30TH SEPTEMBER 2000 CHAIRMAN'S STATEMENT OF SAFELAND PLC I report on a period more dominated by corporate activity than property trading, reflecting market conditions that have prevailed for most of this year. As I reported in my year end statement the property market has been difficult as the expectations of vendors have not been matched by the enthusiasm of purchasers. This has resulted in a somewhat stagnant market place. Although we actively pursue every opportunity, we will never buy at prices which we regard as being too high and therefore unable to deliver adequate shareholder returns. Against this background the six months to 30 September 2000 has seen a reduction in both turnover and profits although there has been an improvement in net asset values. Profits before tax for the period were £0.93m against £ 2.06m for the comparable six months last year on turnover down from £19.01m to £9.57m. Net assets rose to £21.15m from £17.15m, equivalent to 74p per share. Despite lower profits the Board is declaring a maintained dividend of 1p per share payable on 7 March 2001 to shareholders on the register at 9 February 2001. The principal features of the period were the two corporate transactions we undertook. In June we announced the demerger of our managed workspace subsidiary Bizspace on to AIM together with a Placing of new shares in Bizspace. Since then a further centre was acquired and Bizspace recently announced a £8.75m acquisition of a further five workspace centres. Safeland participated in Bizspace's latest acquisition by subscribing for an additional £1.1m of new shares under the Placing and Open Offer which partly funded the purchase. Our participation in Bizspace reflects our confidence in the potential of this new venture and, therefore, we intend to retain our investment in the company and participate, along with the Safeland shareholders who have also retained their holding in Bizspace, in the future growth of the business. In July we sold a 73% stake in Propertytrade Plc, a comprehensive commercial property internet database business which we had been developing, to Bickerton Group Plc in exchange for 6.3m shares in the enlarged business, which has subsequently changed its name to Envesta Plc. As a result of this transaction Safeland now owns approximately 27% of the issued shares of Envesta with Board representation of both Safeland and Propertytrade. These investments, along with those in Safestore Plc and Hercules Property Services Plc, do, in the opinion of the Board, represent sound investments capable of solid future growth. Turning to the prospects for the remainder of the financial year, we do not see any major changes to the property trading environment and therefore our results for the 12 months to 31 March 2001 will reflect the present market conditions. Having said that, however, Safeland is extremely well positioned to take advantage of every available opportunity and I look ahead to the medium and long term with confidence. SAFELAND PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Neither Neither audited audited nor nor reviewed reviewed Six months Six months ended ended 30 September 30 Audited 2000 September Year 1999 ended 31 March 2000 £'000 £'000 £'000 Turnover 9,574 19,008 37,160 Cost of sales (7,268) (15,141) (27,286) Gross profit 2,306 3,867 9,874 Sales and distribution costs (252) (439) (956) Administrative expenses (1,465) (1,244) (3,140) Other operating income 282 237 236 Group Operating profit 871 2,421 6,014 Share of loss in Associates (39) - - Share of operating profit of Joint Venture 535 - 169 Profit on disposal of investment 195 268 614 properties Profit on Ordinary Activities before 1,562 2,689 6,797 Interest Interest receivable and similar income 100 50 297 Interest payable and similar charges (725) (680) (1,454) Profit on ordinary activities before 937 2,059 5,640 taxation Taxation on profit on ordinary activities (281) (631) (1,654) Profit for the financial period/year 656 1,428 3,986 Dividend paid and proposed (285) (287) (232) 3 Retained profit for the period/year 371 1,141 3,754 Basic earnings per share (pence) 2.29p 4.77p 13.58p 2 Diluted earnings per share (pence) 2.29p 4.77p 13.58p 2 SAFELAND PLC CONSOLIDATED BALANCE SHEETS AS AT 30 SEPTEMBER 2000 Neither Neither audited nor audited nor reviewed reviewed 30 September 30 September Audited 1999 2000 31 £'000 March £'000 2000 £'000 Fixed assets Tangible assets 703 802 764 Investment properties 8,300 17,919 10,678 Investments 4,488 3,343 3,343 Interest in Associates 327 - - 10 Investment Share of Gross Assets 2,687 - 2,221 Share of Gross Liabilities 1,983 - 2,052 704 - 169 14,522 22,064 14,954 Current assets Stocks 11,116 13,288 12,198 Debtors: amounts falling due within one 3,468 525 956 year Debtors: amounts falling due after more 4,440 - 4,440 than one year Cash at bank and in hand 5,883 142 8,420 24,907 13,955 26,014 Creditors: amounts falling due within one (2,184) (4,070) (3,928) year Net current assets 22,723 9,885 22,086 Total assets less current liabilities 37,245 31,949 37,040 Creditors: amounts falling due after more than one year (16,098) (14,800)(16,846) Net assets 21,147 17,149 20,194 Capital and reserves Called up share capital 1,426 1,436 1,436 4 Share premium account 5,304 5,304 5,304 Capital redemption reserve 261 251 251 Investment property revaluation reserve 686 473 858 Profit and loss account 13,470 9,685 12,345 Equity shareholders' funds 21,147 17,149 20,194 6 SAFELAND PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Neither Neither audited nor audited nor reviewed reviewed Six months Six months ended ended Audited 30 September 30 September 1999 Year 2000 ended £'000 £'000 31 March 2000 Note £'000 Net cash (outflow)/inflow from 7 (2,283) 4,721 12,025 operating activities Dividends received from associates - 35 - Returns on investment and servicing of finance Interest received 100 15 297 Interest paid (725) (680) (1,454) Net cash outflow from returns on investments and servicing of finance (625) (665) (1,157) Taxation Tax paid (471) (62) (1,044) Capital expenditure and financial investment Purchase of tangible fixed assets (264) (291) (449) Disposal of tangible fixed assets 246 178 282 Purchase of investment properties (142) (2,490) (672) Disposal of investment properties 2,715 2,032 6,116 Amounts paid to joint venture - - (4,440) Net cash outflow from capital expenditure and financial investment 2,555 (571) 837 Acquisitions and disposals Net cash disposed of with (5) - - subsidiary Purchase of associate undertakings (1,145) - - Net cash outflow from acquisitions (1,150) - - and disposals Equity dividends paid Dividends paid - - (759) Cash (outflow)/inflow before (1,974) 3,458 9,902 financing Financing Purchase of own shares (73) (1,359) (1,359) Net loan repayments (490) (5,184) (3,063) Net cash outflow from financing (563) (6,543) (4,422) (Decrease)/increase in cash 9 (2,537) (3,085) 5,480 SAFELAND PLC Statement of Total Recognised Gains and Losses FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 Six months Six months ended ended Year 30 30 ended September September 1999 31 March 2000 2000 £'000 £'000 £'000 Profit for the financial year 656 1,428 3,986 /period Unrealised surplus on revaluation of - - 432 investment properties Unrealised gain on disposal 655 - - of investment Total recognised gains 1,311 1,428 4,418 relating to the year/period SAFELAND PLC NOTES 1. The interim financial information for the six months ended 30 September 1999 and the six months ended 30 September 2000 are neither audited nor reviewed by the auditors. The unaudited interim results have been prepared in accordance with accounting policies set out in the accounts for the year ended 31 March 2000. The financial information in this report for the period ended 30 September 2000 does not comprise statutory accounts within the meaning of the Act. Statutory accounts for the year ended 31 March 2000, which received an unqualified Auditors' Report and contained no statement under section 237 of the Act, have been delivered to the Registrar of Companies. 2. Basic Earnings per Share Basic earnings per share is calculated on profit on ordinary activities of £ 656,000 (30 September 1999: £1,428,000; 31 March 2000: £3,986,000) and on 28,645,468 ordinary shares (30 September 1999: 29,958,200; 31 March 2000: 29,347,276) being the weighted average number of shares in issue throughout the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all dilutive potential ordinary shares. The group does not have any dilutive potential ordinary shares because the exercise price of all share options granted is above the average price of the company's ordinary shares during the periods. 3. Dividend per Share A dividend of 1p per 5p ordinary share (30 September 1999: 1p, 31 March 2000: 1p) will be paid on 7 March 2001 to shareholders appearing on the register at the close of business on 9 February 2001. 4. Repurchased Shares Safeland plc purchased 200,000 of its own shares during the period for total consideration of £73,000. A balance of £10,000 has been transferred to the capital redemption reserve. 5. Demerger A dividend 'in specie' of £2 was recognised as a result of the demerger of Bizspace Trading from Safeland plc. 6. Reconciliation of movements in shareholders' funds Six months Six months ended ended Year ended 30 September 30 September 1999 31 March 2000 2000 £'000 £'000 £'000 Profit for the financial period 656 1,428 3,986 Dividends (285) (287) (232) 371 1,141 3,754 Other recognised gains and losses 655 - 432 Repurchase of shares (including expenses) (73) (1,359) (1,359) Net addition/(reduction) to equity 953 (218) 2,827 shareholders' funds Opening equity shareholders' funds 20,194 17,367 17,367 Closing equity shareholders' funds 21,147 17,149 20,194 7. Reconciliation of operating profit to net cash (outflow)/inflow from operating activities Six months Six months ended ended Year ended 30 September 30 September 1999 31 March 2000 2000 £'000 £'000 £'000 Operating profit 871 2,421 6,014 Depreciation 60 60 145 Profit on sale of fixed assets (12) (27) (20) Decrease in stocks 1,082 1,197 3,424 (Increase)/decrease in debtors (2,252) 749 1,298 (Decrease)/increase in creditors (2,032) 321 1,164 Net cash (outflow)/inflow from operating (2,283) 4,721 12,025 activities 8. Reconciliation of net cash flow to movement in net debt Six months Six months ended ended Year ended 30 September 30 September 1999 31 March 2000 2000 £'000 £'000 £'000 (Decrease)/increase in cash in the (2,537) (3,085) 5,480 period Cash outflow from decrease in debt 490 5,184 3,063 Charge in net debt resulting from (2,047) 2,099 8,543 cash flows Net debt brought forward (9,105) (17,648) (17,648) Net debt carried forward (11,152) (15,549) (9,105) 9. Analysis of net debt At At 1 April Cash Other 30 September changes 2000 flows £'000 2000 £'000 £'000 £'000 Cash 8,420 (2,537) - 5,883 8,420 (2,537) - 5,883 Debt due within one year (679) 490 (748) (937) Debt due after one year (16,846) - 748 (16,098) Total (9,105) (2,047) - (11,152) 10. Interest in Associates Safeland plc acquired 27% of the issued share capital of Envesta on 17 July 2000, as consideration for the disposition of 73% of Propertytrade. This acquisition has been accounted for using the equity method of accounting. As a result of this transaction Propertytrade is no longer a subsidiary of Safeland. A gain of £655,000 arose through the disposal of the 73% interest in Propertytrade, this is considered unrealised and therefore has been taken through the Statement of Total Recognised Gains and Losses. Safelands' remaining 27% interest in Propertytrade has been accounted for using the equity method of accounting. The total loss recognised in the group accounts from Propertytrade from the date of the disposal is a loss of £30,000. 12. Copies of this statement are being sent to all shareholders and are available to the public for collection at the Company's Registered Office at 144 Great North Way, Hendon, London NW4 1EG. Contacts: Safeland PLC Tel: 020-8203 9099 Larry Lipman, Managing Director Paul Davis, Finance Director Bankside Consultants Limited Tel: 020-7220 7477 Baron Phillips

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