Interim Results

RNS Number : 1499Y

Sutton Harbour Holdings PLC

17 December 2010

 



For Immediate release                                                                                                           17 December 2010

Sutton Harbour Holdings plc

Interim Results for the six months ended 30 September 2010

Sutton Harbour Holdings plc ("Sutton Harbour" or "the Group") announces Interim results for the six months ended 30 September 2010.

Enquiries:

Nigel Godefroy, Group Chief Executive

Sutton Harbour Holdings plc                                             Tel: [phone]

Bobbie Hilliam, Evolution Securities                                  Tel: [phone]

Richard Day, Arden Partners                                            Tel: [phone]

Paul Vann/ Tom Cooper, Winningtons Financial                 Tel: [phone] or 07768 807631

Chairman's Statement

The last half year period has been an exceptionally challenging time for the Company with the period being dominated by the protracted sale process of Air South West Limited. In addition, difficult economic conditions remain in the regeneration sector although our marine activities have continued to perform well.

Since its formation in 2003, Air Southwest contributed well to Group profits, until 2009, when a combination of circumstances resulted in a trading loss for that year. In May 2010, we announced the decision to dispose of the airline and, following a competitive process, the Company entered into a conditional agreement for the sale of the entire issued share capital of Air South West Limited to Eastern Airways International Limited in September 2010 (the "Disposal"). The Disposal was completed on 30 November 2010. This has resulted in a significant loss for the Company in the half year period but it was considered necessary by the Board in order to remove a significant risk to the Group and avoid a further drain on the Group's resources. Following the Disposal, Air Southwest has continued to provide air services to the region.

The Group will now be able to re-focus on its core strengths and use its comprehensive regional knowledge and partnering skills to build long-term value through waterfront regeneration activities. Our immediate priorities following the Disposal are to: rebuild the balance sheet; sell the stock of prime property projects many of which are ready to develop with planning consents in place; and reduce debt and gearing. In the last six months the Group has continued to use its strength to build an exciting pipeline of projects which will grow annuity revenues as well as standalone project receipts

Results and dividend

The Group sustained a loss after taxation of £9.18m for the period, of which £8.60m was the loss on the Disposal and the trading losses incurred by Air South West Limited during the period. These losses are accounted for in the interim results as a discontinued operation. The loss before taxation from continuing operations was £0.81m (2009: profit £2.53m). In the corresponding period last year, results benefited from the sale of the first tranche of surplus airport land. In the last six months, marine profits have been stable with increased revenues from fish landings being offset by marginally lower fuel sales. The marina enjoyed higher berthing fees from visitors which offset the slight decline in annual revenues. The Group loss is stated after recording a fair value deficit on investment property of £0.05m (2009: deficit £0.50m)

Because of the loss incurred in the period, the Board is not recommending the payment of an interim dividend in January 2011. Although many shareholders will find this disappointing, the Board must be prudent and expects to resume dividend payments once the cash position of the Group has improved.

Net assets at 30 September 2010 were £33.2m (30 September 2009: £41.9m) compared to £43.1m at 31 March 2010 and includes the deficit on revaluation of owner-occupied property of £0.12m (2009: deficit £0.37m). Gearing, expressed as total debt over net assets, is 65 per cent. as at 30 September 2010 (2009: 41 per cent.).

The Group's banking facilities have been recently renewed with the Royal Bank of Scotland plc comprising a new three year facility for £25m and have been structured to take account of the Group's strategy for the next three years. 

Future strategy

The Board has recently undertaken a review of the Group's strategy, operational activities and prospects. Whilst involvement in transport activities has yielded past success, in future we will focus on our strengths and on our core activities of waterfront regeneration and marine activities. Accordingly, we are currently reviewing our options for our investment in Plymouth City Airport which is currently loss-making. Also, we are in the process of marketing a number of development sites which will enable the Group to reduce stock, reduce debt and raise proceeds that can be used for new projects which have the potential to generate annuity revenues such as rents and fees. This would reduce our reliance on development profits which are more irregular in timing and quantum.

The Group has been steadily growing revenues from its marinas located in Sutton Harbour over recent years. Building upon our marina operation credentials, the Group has been bidding for two new marina projects, including East Cowes which was announced on 25 October 2010 and which will include substantial regeneration activity as well as marina management.

The Group has continued to take a proactive approach to managing its investment portfolio, which constitutes a significant element of the Group's asset base. Additionally we have worked to improve and protect rental incomes which is demonstrated by the resilient performance of the investment portfolio.  We continue to  try to further develop the long-term value of our Sutton Harbour estate and discussions with the BBC are ongoing. In addition, we have an exciting pipeline of projects in Portland, Exeter and Swansea, each of which involves regeneration of urban waterfront areas and in partnership with the public sector, which are traditionally our areas of competitive advantage. In building recurring revenues, we expect to increase our flexibility to bring forward development schemes as market conditions permit.

Staff

This has been a very difficult period for management and staff, particularly those directly affected by the uncertainty surrounding the disposal of Air Southwest and the need to cut costs. I thank all the staff for their continued commitment and hard work throughout this period.

Outlook

The Group is now much better placed to focus its resources on the core marine activities and waterfront regeneration and has the stability of longer term bank financing in place. The Disposal of Air Southwest has been achieved, which removes a substantial cost to the business. The Group has a number of regeneration projects that it is actively working on. Our ability to complete these projects on favourable terms and before the end of the financial year is expected to be impacted by the current market environment. The Group has a strong portfolio of assets and the Group's management looks forward to developing new opportunities, as well as those already in the pipeline, with a greater emphasis on developing recurring revenues and to re-shape the Group for future growth.

Michael Knight

Chairman

Consolidated Income Statement

	Note	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Continuing operations
Revenue	3	4,071	7,142	17,655
Cost of sales		(3,511)	(3,133)	(9,456)
Gross Profit		560	4,009	8,199
Other operating income		-	8	40
Administration expenses		(969)	(860)	(1,422)
Profit arising on disposal of fixed assets		-	3	-
Operating (loss)/profit before fair value adjustments on investment property		(409)	3,160	6,817
Fair value adjustments on investment property	7	(45)	(501)	(539)
Operating (loss)/profit	3	(454)	2,659	6,278
Financial income		-	3	4
Financial expense		(359)	(135)	(270)
Net financing costs		(359)	(132)	(266)
(Loss)/profit before tax from continuing operations		(813)	2,527	6,012
Taxation on loss/(profit) from continuing operations	4	228	(708)	(1,520)
(Loss)/profit for the period from continuing operations		(585)	1,819	4,492
Loss for the period from discontinued operations	10	(8,598)	(954)	(2,391)
(Loss)/profit for the period		(9,183)	865	2,101
Basic earnings per share	6
From continuing operations		(0.93)p	3.48p	7.79p
From discontinued operations		(13.66)p	(1.83p)	(4.15p)
Diluted earnings per share	6
From continuing operations		(0.93)p	3.45p	7.79p
From discontinued operations		(13.66)p	(1.81p)	(4.15p)

 

Consolidated Statement of Comprehensive Income

		6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
(Loss)/profit for the period		(9,183)	865	2,101
Other comprehensive income/(expense)
Continuing operations:
Revaluation of property, plant and equipment		(119)	(367)	220
Deferred taxation on income and expenses recognised     directly in equity		-	-	(62)
Effective portion of changes in fair value of cash flow     hedges		101	(43)	66
Discontinued operations:
Revaluation of property, plant and equipment		-	-	-
Deferred taxation on income and expenses recognised    directly in equity		-	-	-
Effective portion of changes in fair value of cash flow    hedges		(128)	(221)	(290)
Total other comprehensive expense		(146)	(631)	(66)
Total comprehensive (expense)/income for the period attributable to equity shareholders		(9,329)	234	2,035

Consolidated Balance Sheet

	Note	As at 30 September 2010 (unaudited) £000	As at 30 September 2009 (unaudited) £000	As at 31 March 2010 (audited) £000
Non-current assets
Property, plant and equipment	7	28,994	36,556	37,971
Intangible assets		-	490	472
Investment property	7	20,531	20,550	20,551
Investment in associate		93	-	93
Other financial assets		-	130	130
		49,618	57,726	59,217
Current assets
Inventories		11,588	12,852	11,315
Trade and other receivables		1,925	3,011	2,580
Cash and cash equivalents	8	220	6	7
Derivative financial instruments		-	523	100
		13,733	16,392	14,002
Assets of disposal group classified as held for sale	10	5,465	-	-
Total assets		68,816	74,118	73,219
Current liabilities
Bank overdraft	8	21,673	13,996	14,549
Other interest-bearing loans and borrowings		-	3,042	431
Trade and other payables		1,684	6,222	5,009
Deferred income		915	2,465	3,733
Deferred government grants		-	-	39
Derivative financial instruments		66	111	168
Provisions for other liabilities and charges Tax payable	9	1,438 83	145 135	46 427
		25,859	26,116	24,402
Non-current liabilities
Other interest-bearing loans and borrowings		31	291	116
Deferred government grants		668	304	685
Deferred tax liabilities		3,568	5,260	4,704
Derivative financial instruments		-	276	-
Provisions for other liabilities and charges		-	-	179
		4,267	6,131	5,684
Liabilities of disposal group classified as held for sale	10	5,465	-	-
Total liabilities		35,591	32,247	30,086
Net assets		33,225	41,871	43,133
Equity and reserves
Share capital		15,736	15,736	15,736
Share premium		12	12	12
Other reserves		13,336	12,916	13,482
Retained earnings		4,141	13,207	13,903
Total equity		33,225	41,871	43,133

Consolidated Statement of Changes in Equity

	Share capital	Share premium	Revaluation reserve	Merger reserve	Hedging reserve	Retained earnings	TOTAL
			--------Other Reserves-----------
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 April 2009	12,640	10	9,521	251	156	12,836	35,414
Comprehensive Income
Profit for the period	-	-	-	-	-	865	865
Other comprehensive income
Revaluation of property, plant and equipment	-	-	(368)	-	-	-	(368)
Effective portion of changes in fair value of cash flow hedges	-	-	-	-	(264)	-	(264)
Total other comprehensive income - period ended 30 September 2009	-	-	(368)	-	(264)	-	(632)
Total comprehensive income  - period ended 30 September 2009	-	-	(368)	-	(264)	865	233
Transactions with owners
Proceeds from issue of shares net of costs	3,096	2	-	3,620	-	-	6,718
Share-based payments - value of employee services	-	-	-	-	-	12	12
Dividends	-	-	-	-	-	(506)	(506)
Transactions with owners	3,096	2	-	3,620	-	(494)	6,224
As at 30 September 2009	15,736	12	9,153	3,871	(108)	13,207	41,871
Comprehensive income
Profit for the period	-	-	-	-	-	1,236	1,236
Other comprehensive income
Revaluation of property, plant and equipment	-	-	588	-	-	-	588
Deferred taxation on revaluation of property, plant and equipment	-	-	(62)	-	-	-	(62)
Effective portion of changes in fair value of cash flow hedges	-	-	-	-	429	-	429
Recycled to cost of sales	-	-	-	-	(389)	-	(389)
Total other comprehensive income  - period ended 31 March 2010	-	-	526	-	40	-	566
Total comprehensive income - period ended 31 March 2010	-	-	526	-	40	1,236	1,802
Transaction with owners
Share-based payments - value of employee services	-	-	-	-	-	26	26
Dividends	-	-	-	-	-	(566)	(566)
Transactions with owners	-	-	-	-	-	(540)	(540)
As at 31 March 2010	15,736	12	9,679	3,871	(68)	13,903	43,133
Comprehensive income
Loss for the period	-	-	-	-	-	(9,183)	(9,183)
Other comprehensive income
Revaluation of property, plant and equipment	-	-	(119)	-	-	-	(119)
Effective portion of changes in fair value of cash flow hedges	-	-	-	-	73	-	73
Recycled to cost of sales	-	-	-	-	(100)	-	(100)
Total other comprehensive income  - period ended 30 September 2010	-	-	(119)	-	(27)	-	(146)
Total comprehensive income - period ended 30 September 2010	-	-	(119)	-	(27)	(9,183)	(9,329)
Transactions with owners
Share-based payments - value of employee services	-	-	-	-	-	50	50
Dividends	-	-	-	-	-	(629)	(629)
Transactions with owners	-	-	-	-	-	(579)	(579)
As at 30 September 2010	15,736	12	9,560	3,871	(95)	4,141	33,225

               

Consolidated Cash Flow Statement

	Note	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Cash (used in)/generated from operations	11	(5,009)	(882)	4,324
Tax (paid)/received		(22)	124	(280)
Net cash (used in)/generated from operating activities		(5,031)	(758)	4,044
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		-	3	-
Expenditure on investment in associate		(1)	-	(93)
Expenditure on investment property		(25)	(218)	(257)
Expenditure on property, plant and equipment		(703)	(1,596)	(3,124)
Interest received		1	10	11
Net cash used in investing activities		(728)	(1,801)	(3,463)
Cash flows from financing activities
Proceeds from issue of share capital - Placing                                                                     - Other		- -	6,713 7	6,713 5
Proceeds from new loan		-	2,287	117
Interest paid		(368)	(366)	(705)
Repayment of borrowings		(249)	(430)	(1,045)
Dividends paid		(629)	(506)	(1,072)
Net cash (used in)/generated from financing activities		(1,246)	7,705	4,013
Net (decrease)/increase in cash and cash equivalents		(7,005)	5,146	4,594
Cash and cash equivalents at beginning of period		(14,542)	(19,136)	(19,136)
Cash and cash equivalents at end of period	8	(21,547)	(13,990)	(14,542)

Notes to the interim report

1.    General information

This consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 March 2010 were approved by the Board of Directors on 25 May 2010 and delivered to the Registrar of Companies.  The report of the auditors on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006. It did, however, contain an emphasis of matter paragraph in relation to the carrying value of Air Southwest.

Copies of the Group's financial statements are available from the Company's registered office, North Quay House, Sutton Harbour, Plymouth, PL4 0RA and on the Company's website www.sutton-harbour.co.uk.

This consolidated interim financial information has not been audited.

2.      Basis of preparation

The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2010, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) interpretations as endorsed by the European Union, and those parts of the Companies Acts 2006 as applicable to companies reporting under IFRS.

Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2010, as described in those annual financial statements.

Adoption of new International Financial Reporting Standards

IFRS 5 (amendment) 'Non-current assets held for sale and discontinued operations' clarifies that IFRS 5 specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. It also clarifies that the general requirements of IAS 1 still apply.

The consolidated interim financial information has been prepared under the revised disclosure requirements of IFR 5 (amendment) as stated above. There was no impact on the results or net assets of the Group.

The following new standards, amendments to standards and interpretations are not applicable to current activity in the Group: IAS 36 (amendment) ' Impairment of Assets'; IFRS 2 (amendments) 'Group cash-settled share-based payment transactions'; IFRIC 9 'Reassessment of embedded derivatives and IAS 39, Financial instruments: Recognition and measurement'; IFRIC 16 'Hedges of a Net Investment in a Foreign Operation'; IFRIC 17 'Distribution of Non-Cash Assets to Owners'; IFRIC 18 'Transfers of Assets from Customers'.

The following new standards, amendments and interpretations issued but not effective for the current period have not been adopted early:  

IFRS 9 'Financial instruments'; Revised IAS 24 (revised) 'Related party disclosures'; 'Classification of rights issues' (amendment to IAS 32); IFRIC 19 'Extinguishing financial liabilities with equity instruments'; 'Prepayments of a minimum funding requirement' (amendments to IFRIC 14).

Accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

There have been no significant changes to estimates and judgements since the signing of the financial statements for the year ended 31 March 2010.

 3.  Segment information

Management has determined the operating segments based on the reports reviewed by the board of directors that are used to make strategic decisions.

The board of directors considers the business from an operational perspective as the Group has only on geographical segment, with all operations being carried out in the United Kingdom.

The board of directors considers the performance of the operating segments using operating profit. The segment information provided to the board of directors for the reportable segments for the period ended 30 September 2010 is as follows:

Business segments:

	6 months to 30 Sept 2010	6 months to 30 Sept 2009	12 months to 31 Mar 2010
	(unaudited)	(unaudited)	(audited)
	£000	£000	£000
External revenue:
Marine activities	2,537	2,404	4,235
Regeneration	715	3,978	11,901
Transport - continuing operations	819	760	1,519
Total external revenue = total revenue	4,071	7,142	17,655
Segment operating profit:
Marine activities	781	858	1,430
Regeneration prior to fair value adjustment of investment property	121	3,344	7,279
Fair value adjustment on investment property	(45)	(501)	(539)
Regeneration after fair value adjustment on investment property	76	2,843	6,740
Transport - continuing operations	(342)	(182)	(470)
	515	3,519	7,700
Unallocated expenses:
Administrative expenses - continuing operations	(969)	(860)	(1,422)
Group operating (loss)/profit	(454)	2,659	6,278
Financial income	-	3	4
Financial expense	(359)	(135)	(270)
Taxation	228	(708)	(1,520)
(Loss)/profit for the period	(585)	1,819	4,492
Assets and liabilities
Segment assets:
Marine activities	22,309	22,011	22,221
Regeneration	32,891	34,587	32,872
Transport	7,047	16,859	17,232
Transport - assets held for sale	5,465	-	-
Total segment assets	67,712	73,457	72,325
Unallocated assets: Property plant & equipment                                       Investment in associate                                       Trade & other receivables	329 93 682	301 - 360	304 93 497
Total assets	68,816	74,118	73,219
Segment liabilities:
Marine activities	950	849	1,502
Regeneration	680	4,065	1,073
Transport	1,188	7,843	6,883
Transport - assets held for sale	5,465	-	-
Total segment liabilities	8,283	12,757	9,458
Unallocated liabilities: Bank overdraft                                          Trade & other payables	21,673 1,984	13,996 234	15,055 442
Deferred tax liabilities	3,651	5,260	5,131
Total liabilities	35,591	32,247	30,086

Unallocated assets included in total assets and unallocated liabilities included in total liabilities are not split between segments as these items are centrally managed.

4. Taxation

Continuing Operations

The company has applied an effective tax rate of 28% (2009: 28%) based on management's best estimate of the tax rate expected for the full financial year.

Discontinued Operations

The company has applied an effective tax rate of 28% to the trading losses of the discontinued operations.

The loss recognised on the re-measurement of the assets of the disposal group is not tax deductible.

£892,000 of the consideration payable to Eastern Airways International Limited is not expected to be tax deductible.

5. Dividends

	6 months to 30 September  2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Final Dividend in respect of the year ended 31 March 2010 (31 March 2009)	629	506	506
Interim Dividend in respect of the year ended 31 March 2010	-	-	566
	629	506	1,072

The board of directors do not propose an interim dividend (2009: 0.9p totalling £566,494).

6. Earnings per share

	6 months to 30 September 2010 (unaudited) pence	6 months to 30 September 2009 (unaudited) pence	Year Ended 31 March 2010 (audited) pence
Continuing operations
Basic earnings per share	(0.93)p	3.48p	7.79p
Diluted earnings per share	(0.93)p*	3.45p	7.79p*
Discontinued operations
Basic earnings per share	(13.66)p	(1.83)p	(4.15)p
Diluted earnings per share	(13.66)p*	(1.81)p	(4.15)p*

Basic Earnings per Share:

Basic earnings per share have been calculated using the loss for the period of £585,000 (2009: profit £1,819,000) for the continuing operations, and the loss for the period of £8,598,000 (2009: £954,000) for the discontinued operations. The average number of ordinary shares in issue, excluding those options granted under the SAYE scheme, of 62,943,752 (2009: 52,330,463) has been used in our calculation.

Diluted Earnings per Share:

Diluted earnings per share uses an average number of 63,514,771 (2009: 52,790,358) ordinary shares in issue, and takes account of the outstanding options under the SAYE scheme in accordance with IAS 33 'Earnings per share'.

* For the year ended 31 March 2010 and the 6 months ended 30 September 2010, there is no adjustment for the effect of all dilutive potential ordinary shares because the exercise prices of the options are greater than the average market price of the shares during the year.

7. Property valuation

Freehold land and buildings and investment property have been independently valued by Lambert Smith Hampton as at 30 September 2010 in accordance with the Practice Statements in the Valuations Standards (The Red Book) published by the Royal Institution of Chartered Surveyors. 

The basis for determining the property values is as described in the financial statements for the year ended 31 March 2010.

8. Cash and cash equivalents

	As at 30 September 2010 (unaudited) £000	As at 30 September 2009 (unaudited) £000	As at 31 March 2010 (audited) £000
Continuing operations:
Cash and cash equivalents per balance sheet	220	6	7
Bank overdraft	(21,673)	(13,996)	(14,549)
	(21,453)	(13,990)	(14,542)
Assets/(liabilities) of disposal group classified as held for sale:
Cash and cash equivalents per balance sheet	5	-	-
Bank overdraft	(99)	-	-
	(94)	-	-
Cash and cash equivalents per cash flow statement	(21,547)	(13,990)	(14,542)

9. Provisions

Of this total provision amount, £1,392,000 relates to the disposal of the airline. This balance is expected to cover amounts due to Eastern Airways International Limited, in accordance with the sale and purchase agreement, as well as other anticipated costs.

10. Discontinued operations

Sutton Harbour Holdings plc announced on 25 May 2010 its intention to sell the airline subsidiary, Air Southwest Limited. Contracts for sale and purchase of the airline were exchanged on 17 September 2010 with Eastern Airways International Limited. The sale was completed on 30 November 2010.

The net profit or loss that accrued from 1 October 2010 to 30 November 2010 will accrue to Eastern Airways International Limited, in accordance with the terms of the sale and purchase agreement.

The Air Southwest operations represented a separate major line of business for the Sutton Harbour Group. As a result of the agreed disposal, these operations have been treated as discontinued operations for the 6 months ended 30 September 2010. An amount is shown on the face of the income statement comprising the post tax result of discontinued operations and the related provisions made as a result of reclassification as held for sale. That is, the income and expenses of Air South West Limited are shown separately from the continuing operations of the Sutton Harbour Group.

The re-measurement of the assets of the disposal group and the provision for consideration payable are subject to final closing adjustments to be agreed with the purchaser, hence these figures are managements best estimate of the expected outcome.

A.  Income statement

	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Discontinued operations
Revenue	10,403	12,059	21,619
Cost of sales	(12,374)	(13,373)	(25,256)
Gross Loss	(1,971)	(1,314)	(3,637)
Other operating income	-	-	250
Other operating expenses	-	-	(88)
Operating loss	(1,971)	(1,314)	(3,475)
Financial income	1	7	7
Financial expense	(5)	(18)	(29)
Net financing costs	(4)	(11)	(22)
Loss before tax from discontinued operations	(1,975)	(1,325)	(3,497)
Taxation on loss from discontinued operations	553	371	1,106
Loss for the period from discontinued operations	(1,422)	(954)	(2,391)
Provision (see note 9)	(1,392)	-	-
Costs of disposal incurred to date	(274)	-	-
Pre tax loss resulting from provisions and disposal costs	(1,666)	-	-
Taxation on provisions made	140	-	-
Loss resulting from provisions and disposal costs	(1,526)	-	-
Loss recognised on re-measurement of assets of disposal group (not tax deductible)	(5,650)	-	-
Loss for the period from discontinued operations	(8,598)	(954)	(2,391)

B.  Balance Sheet of Air South West Limited

	2010 £000
Non-current assets
Property, Plant and Equipment	410
Aircraft	3,271
Other financial assets	55
	3,736
Current Assets
Inventories	319
Trade and other receivables	777
Cash and Cash equivalents	6
Corporation Tax	627
	1,729
Assets of disposal group	5,465
Non-current liabilities
Other interest bearing loans and borrowings	(268)
Deferred tax liabilities	(1,166)
	(1,434)
Current Liabilities
Bank overdraft	(99)
Trade and other payables	(2,559)
Deferred Income	(1,345)
Derivative financial instruments	(28)
	(4,031)
Liabilities of disposal group	(5,465)

C.  Cash flows

	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Cash flows from discontinued operations
Operating	(3,141)	(1,217)	(586)
Investing	(366)	(1,304)	(2,136)
Financing	(243)	(470)	(954)
Net cash outflow	(3,750)	(2,991)	(3,676)

11. Cash flow statements

Continuing operations:

	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Cash flows from operating activities
(Loss)/profit for the period	(585)	1,819	4,492
Adjustments for:
Taxation	(228)	708	1,520
Financial income	-	(3)	(4)
Financial expense	358	135	270
Fair value adjustments on investment property	45	501	539
Gain on re-measurement of derivative financial instruments to fair value	-	(27)	-
Gain on ineffective portion of cash flow hedge	-	-	217
Depreciation and amortisation	89	78	182
Amortisation of grants	(18)	(11)	(40)
Loss on disposal of investment property	-	-	-
Loss on sale of property, plant and equipment	-	61	88
Equity settled share-based payment expenses	12	7	17
Grants received	-	-	449
Cash generated from operations before changes in working capital and provisions	(327)	3,268	7,730
Increase in inventories	(552)	(1,029)	(479)
(Increase)/decrease in trade and other receivables	(300)	(1,301)	43
Decrease in trade and other payables	(103)	(6)	(2,311)
Increase/(decrease) in deferred income	(586)	(566)	(7)
Increase/(decrease) in provisions	-	(31)	(66)
Cash (used in)/generated from operations	(1,868)	335	4,910

Discontinued operations:

	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year Ended 31 March 2010 (audited) £000
Cash flows from operating activities
Loss for the period	(8,598)	(954)	(2,391)
Adjustments for:
Taxation	(693)	(371)	(1,106)
Financial income	(1)	(7)	(7)
Financial expense	5	18	29
Depreciation and amortisation	683	505	1,084
Loss on sale of property, plant and equipment	8	-	-
Re-measurement of assets of disposal group	5,650	-	-
Equity settled share-based payment expenses	38	5	21
Cash generated from operations before changes in working capital and provisions	(2,908)	(804)	(2,370)
Increase in inventories	(40)	(22)	(33)
Decrease in trade and other receivables	178	239	526
(Decrease)/increase in trade and other payables	(659)	32	1,244
(Decrease)/increase in deferred income	(925)	(616)	93
Increase/(decrease) in provisions	1,213	(46)	(46)
Cash (used in) operations	(3,141)	(1,217)	(586)

Total cash used in operations:

	6 months to 30 September 2010 (unaudited) £000	6 months to 30 September 2009 (unaudited) £000	Year ended 31 March 2010 (audited) £000
Continuing operations	(1,868)	335	4,910
Discontinued operations	(3,141)	(1,217)	(586)
Total cash (used in)/generated from operations	(5,009)	(882)	4,324

 

END

 

 

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