AGM Statement

RNS Number : 9370M

Sutton Harbour Holdings PLC

24 August 2011

 



Sutton Harbour Holdings plc ("the Company", "the Group")

AGM Statement

This year's Annual Report sets out details of the Group's strategy to develop our core marine and regeneration activities in order to provide future growth in revenues and asset values whilst extricating ourselves from the troubled regional aviation sector.

Throughout the summer we have continued with this transition bringing forward new marina opportunities at Millbay in Plymouth and at East Cowes. These opportunities, together with other related activities around Sutton Harbour are consistent with our specific objectives which are to:

·     Build on our existing marina operations to become a prominent player in UK marina management

·     Extend our operations and reputation as a developer of waterfront sites for mixed use

·     Regenerate sites in partnership with other public and private bodies, as market conditions permit, with particular focus on the South West region

·     Continue to drive value from the existing investment property portfolio

The existing investment property portfolio continues to perform well in the current year. Many of our tenants have benefited from the additional business attracted by such events as the Rolex Fastnet Race finish which Sutton Harbour hosted last week. This is the third major international event we have hosted in the last four years in addition to smaller events including berthing of the HMS Bounty replica tallship earlier in the season.

The Group's core marine, rental and car park businesses have continued to trade well throughout the summer season, with the fishmarket maintaining the recent run of high fish landings.

Following the difficult exit from regional aviation, the Group is currently cash constrained. However, we have a number of non-core trading assets ready for disposal. These include:

·     East Quays where we have a committee resolution for planning permission for 62 apartments

·     Commercial premises we have developed in Exeter

·     Care Home land near the airport

·     A small residential scheme in Portland

·     Our Investment in Cumbria LIFT

These sales, together with the potential opportunities arising from the airport land, will significantly reduce the Company's debt and release funds for future investment. To fund new projects, in the short term, the Group needs to balance the disposal of non-core assets for cash now, against the potential for future increases in value.

We are bringing our property projects to fruition. Sale of the 4^th tranche of airport land is expected in this financial year and we are now constructing the link road to facilitate access to that site. The Group will continue with its other regeneration projects although our ability to bring forward projects has, of course, been impacted by the prolonged difficulties in the UK property markets which particularly affects schemes in provincial locations. The Group has a good pipeline of opportunities for the future which will be advanced when market conditions improve.

Active discussions have continued with the BBC and Sir Robert McAlpine Enterprises  for premises on the East Quays site throughout the summer period. We have long stated our desire to see this development take shape.

Since my year end statement on 15 June 2011 the intended cessation of operations at Plymouth City Airport has continued to be a particular focus of interest in the media. The Group has continued to operate the airport and facilitate scheduled aircraft operations as usual. Air Southwest gave notice to suspend operations during August 2011 and to withdraw completely from Plymouth City Airport on 14 September 2011. This leaves the airport with very little traffic and the airport company is currently in consultation with staff to reduce headcount. Now that Plymouth City Council has confirmed that the airport can close, the loss incurred prior to closure together with the associated costs will be reflected in our forthcoming interim results for this discontinuing business.

The financial markets and equity share prices continue to be extremely volatile and Sutton Harbour's shares currently trade at a significant discount to the Company's net asset value. We believe the Group has taken the appropriate action to re-position its activities and has a credible and positive strategy in place for the future. These are essential building blocks for improved share price performance. Our actions have involved difficult decisions but we believe they are in the best long-term interests for your Company. We are making good progress towards the objective of refocusing the Group to achieve stable profitability from our core operations, from which dividends can then be paid.

In summary, the management team has made strenuous efforts and significant progress towards repositioning the Group for the future. They have disposed of the airline in a challenging market; are close to exiting the loss-making airport operations; have a plan to develop East Quays and have successfully achieved preferred bidder status on two new marina projects. We have been clear on the strategy to de-risk the business from loss-making activities and to focus on growth in annuity income earning activities which we believe will also provide considerable scope for asset growth. We believe this is the best strategic response to the market conditions in which we currently operate.

For further information, please contact:

Sutton Harbour Holdings plc

Nigel Godefroy

01752 204186

Arden Partners plc

Richard Day

Steve Douglas

Jamie Cameron

0207 614 5917   

Threadneedle Communications

Graham Herring

Terry Garrett

020 7653 9850

 

END

 

 

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