Final Results

Solitaire Group PLC 28 April 2003 28 April 2003 SOLITAIRE GROUP Plc Solitaire is a leading national provider of property management services PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 'Excellent progress and growth for Solitaire' Highlights Change Year ended Year ended Per Cent 31 Dec 2002 31 Dec 2001 Turnover +16.8 5,911,000 5,062,000 Profit before tax, amortisation, +9.3 1,805,000 1,651,000 exceptional costs & interest Profit before tax +24.9 1,447,000 1,159,000 Earnings per share +22.7 21.6p 17.6p Final dividend +8.1 7.3p 6.75p Total dividend +8.4 10.3p 9.5p • Solitaire properties under management increased by over 2,000 despite removing some 900 unprofitable contracts. • New instructions for property management continue at record levels and the size of developments is increasing. • Moss Kaye Pembertons continues trading in line with expectations. • Successful new office in Leicester has already led to a number of new management instructions in the Midlands. The Board is also considering the opening of another branch office on or near the South Coast. George Brutton, Chairman of Solitaire Group Plc, commented: 'The continuing growth in your company's core residential management business confirms Solitaire's position as one of the UK 's market leaders in the sector. 'Whilst the current economic climate is uncertain for many companies, the sustainable revenue stream from our property management business, taken together with the number of contracts entered into for new development, gives us confidence for the future. Trading in the current year has started well.' For further information: Graham Shapiro, Joint Managing Director Tel: 020 8364 8497 Solitaire Group Plc Tarquin Edwards / Simon Rothschild Tel: 020 7929 5599 Holborn Chairman's statement I am pleased to report that the number of residential developments under management or where we hold contracts for future management continues to increase and this growth bodes well for the future; we expect the benefit from many of these future contracts to be felt in 2003. We have also seen a trend towards the management of larger developments most of which are exclusively residential, but some have a commercial element. A number of new developments came under management later in the year than was originally anticipated. This delay has had a marginal impact on our revenues this year. In response to the increased level of new business we established last year our first branch office in Leicester to manage developments in the Midlands. This move has already led to a number of new management instructions in that region. As a consequence the board is considering the opening of another branch office on or near the South Coast to manage the group's substantial estates in that area. Our expenses have increased following an exceptional and unprecedented market wide increase in liability insurance rates as well as the one off set-up costs of our office in Leicester. The current economic climate is uncertain for many companies .The sustainable revenue stream from our property management business taken together with the number of contracts entered into for the management of new developments, gives us confidence for the future. Results Turnover increased by 16.8 per cent to £5,911,000 (2001: £5,062,000) and includes a full year from Moss Kaye Pembertons, against only seven months in 2001. The operating profit for the year ended 31 December 2002, before writing off exceptional costs, goodwill amortisation and interest, increased by 9.3 per cent to £1,805,000 (2001: £1,651,000). The group incurred certain other costs relating to the promotion of ultimately abortive property investment initiatives in 2002 and a provision relating to the future exercise of share options necessary under UITF 17. These have been included as exceptional costs. Accordingly, after exceptional costs, interest and goodwill amortisation, pre-tax profits were up by £288,000 or 24.9 per cent to £1,447,000 (2001: £1,159,000) and earnings per share under FRS 14 were up by 22.7 per cent to 21.6p (2001: 17.6p). Adjusted earnings per share, before exceptional costs, goodwill amortisation and interest were 26.2p (2001: 25.8p). The board is recommending the payment of an increased final dividend of 7.3p (2001: 6.75p) per share making a total for the year of 10.3p (2001: 9.5p), an increase of 8.4 per cent over 2001. This will be paid on 24 June 2003 to shareholders on the register on 9 May 2003. Business development Organic growth from our core business remains the board's prime aim. We continue to examine the acquisition of companies that provide a strong fit with Solitaire's underlying business but will only proceed if we feel that the business is sufficiently robust and will provide enhanced shareholder value. We are pleased with the positive response that our Leicester office has generated and we will consider opening further regional offices in the future to better serve our developer and residential clients. People After the year-end Tom Quinn retired as a non-executive director. Tom has been a board member since the flotation in 1997 and the board will miss his assistance and wise counsel. I am happy to welcome Chris Phillips as Tom's replacement as a non-executive director, which was announced on 11th of February. Chris has a strong background in residential property and will be providing valuable experience and support to the board. He is a director of Colliers CRE responsible for investment management and is the non-executive chairman of both Marchpole Holdings Plc and Spring Grove Property Maintenance Plc. We continue to strengthen our core property management team and are very pleased with the way our staff have integrated the ever-increasing numbers of properties under management into our portfolio. I would wish to record my sincere thanks to all our staff for their hard work and commitment to maintaining our high standards of client service. The future The continuing growth in your company's core residential management business confirms Solitaire's position as one of the UK's market leaders in the sector. The stability afforded by a forecasted low interest rate environment is welcomed by the property sector generally and will substantially underpin our clients' on-going development programmes. This in turn should have a positive impact on the group's growth in the forthcoming years. Trading in the current year has started well. George Brutton FRICS Chairman 28 April 2003 Consolidated profit and loss account 2002 2001 Notes £'000 £'000 ________ _______ Turnover 5,911 5,062 ________ _______ Operating expenses External fees and commissions 276 245 Other administration expenses 3,830 3,166 ________ _______ 1,805 1,651 Amortisation of goodwill and development costs 115 140 Exceptional costs 2 95 233 ________ _______ Operating profit 1,595 1,278 Net Interest paid (148) (119) ________ _______ Profit on ordinary activities before taxation 1,447 1,159 Taxation on ordinary activities 450 354 ________ _______ Profit on ordinary activities after taxation 997 805 Dividends 4 475 433 ________ _______ Retained profit for the year 522 372 ________ _______ Basic and diluted earnings per share 5 21.6p 17.6p Adjustment for amortisation 2.5p 3.1p Adjustment for exceptional costs 2.1p 5.1p ________ _______ Adjusted earnings per share 5 26.2p 25.8p ________ _______ Consolidated balance sheet Group Company 2002 2001 2002 2001 Notes £'000 £'000 £'000 £'000 ________ ________ ________ _______ Fixed assets Intangible assets 1,792 1,880 - - Tangible assets Office equipment 184 171 - Freehold land and buildings 3 261 181 - Freehold investment reversions 3 11,739 9,290 - Investments - - 3,190 3,190 12,184 9,642 3,190 3,190 ________ ________ ________ _______ 13,976 11,522 3,190 3,190 ________ ________ ________ _______ Current assets Debtors 1,888 1,976 2,382 2,684 Cash and deposits 101 226 2 3 ________ ________ ________ _______ 1,989 2,202 2,384 2,687 Creditors: amounts falling due within one year Borrowings 790 1,035 754 813 Other liabilities 1,337 1,492 416 740 ________ ________ ________ _______ Net current (liabilities) / assets (138) (325) 1,214 1,134 ________ ________ ________ _______ Total assets less current liabilities 13,838 11,197 4,404 4,324 ________ ________ ________ _______ Creditors: amounts falling due after more than one year Borrowings 1,779 1,659 434 350 ________ ________ ________ _______ Net Assets 12,059 9,538 3,970 3,974 ________ ________ ________ _______ Capital and reserves Called-up share capital 462 462 462 462 Share premium account 2,647 2,647 2,647 2,647 Revaluation reserve 6,731 4,731 - - Profit and loss account 2,219 1,698 861 865 ________ ________ ________ _______ Equity shareholders' funds 12,059 9,538 3,970 3,974 ________ ________ ________ _______ Consolidated cash flow statement Restated 2002 2001 Notes £'000 £'000 ________ _______ Cash flow from operating activities 1,752 1,283 Returns on investments and servicing of finance Interest received 18 8 Interest paid (166) (127) ________ _______ Net cash outflow from returns on investment and servicing of finance (148) (119) ________ _______ UK corporation tax (511) (384) ________ _______ Capital expenditure and financial investment Office equipment (92) (154) Purchase of freehold reversions (584) (670) Disposal of fixed assets 55 - ________ _______ Net cash outflow from capital expenditure and financial investment (621) (824) ________ _______ Acquisition of subsidiary (26) (1,015) Equity dividends paid (446) (411) ________ _______ Cash outflow before use of liquid resources and financing 0 (1,470) ________ _______ Management of liquid resources and financing Financing 153 786 ________ _______ Increase/(decrease) in cash in the year 153 (684) ________ _______ 2002 2001 Reconciliation of net cash flow to movement in net debt £'000 £'000 ________ _______ Increase/(decrease) in cash in the year 153 (684) Cash inflow from increased debt (153) (662) ________ _______ Movement in net debt 0 (1,346) Opening net debt (2,468) (1,122) ________ _______ Closing net debt (2,468) (2,468) ________ _______ SOLITAIRE GROUP Plc Notes 1. Basis of preparation The results and balance sheet incorporate the audited results of Solitaire Group Plc and all its subsidiaries made up to 31 December 2002 and have been prepared on a basis consistent with the audited financial statements for the year ended 31 December 2001. The comparative numbers in the cash flow for the reconciliation of net debt have been adjusted to reflect a change in the method of displaying the funds arising from the issue of shares under the groups share option scheme. 2. Exceptional costs Certain costs resulting from abortive acquisitions and initiatives have been written off as exceptional costs as has a provision relating to the future exercise of share options necessary under UITF 17. Some of these costs are not an allowable expense in the calculation of the tax charge for the year. 3. Revaluation The directors obtained an external valuation of the freehold reversions and properties held by the group at the year-end and have increased the value by £2,000,000. 4. Dividends During the year the company paid an interim dividend of 3.00p (2001: 2.75p) per share. The company has proposed a final dividend of 7.3p (2001: 6.75p) per share making a total of 10.3p (2001: 9.5p) for the year. 5. Earnings per share The calculation of earnings per share for the year ended 31 December 2002 is based on earnings of £997,000 (2001: £805,000) and a weighted average number of shares in issue of 4,623,581 (2001: 4,575,873). There is no significant difference between basic and diluted earnings per share in 2002 and 2001. The adjusted earnings per share are based on the profits for the year after tax adjusted for amortisation of goodwill and development costs and exceptional costs. 6. Results The results for the year ended 31 December 2002 have been extracted from the audited financial statements, which will shortly be sent to shareholders and filed with the Registrar of Companies. The auditor's report on these accounts was unqualified. This information is provided by RNS The company news service from the London Stock Exchange

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