Final Results

Artisan (UK) PLC 9 July 2001 ARTISAN (UK) plc (AIM) (House builder & commercial property developer) PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2001 HIGHLIGHTS Key points: * Group Turnover £81,364,520 up 134% (£34,821,517 for year to 31.3.00) * EBITDA £11,622,947 up 166% (£4,363,252 for year to 31.3.00) * Total operating profit £10,621,768 up 154% (£4,181,157 for year to 31.3.00) * EBITDA Earnings per share 4.4p up 34% (3.3p for year to 31.3.00) * Earnings per share 2.6p up 20% (2.2p for year to 31.3.00) * Shareholders funds £34,146,473 up 35% (£25,331,903 (restated) at 31.3.00) * Net asset value per share 11.9p up 16% (10.2p (restated) per share at 31.3.00) * Dividend per share 0.6p up 20% (0.5p per share for 31.3.00) * Net cash improvement £7,693,279 up 199% (£2,570,423 at 31.3.00) Commenting on the results, Artisan's Chairman Stephen Dean said: 'The year to 31st March 2001 has been another milestone in the development of Artisan (UK) plc. The group has now totally disposed of its IT and regional contracting businesses profitably, and is highly focused on residential and commercial developments as its core business.' Enquiries: Artisan (UK) plc 01480 436666 Stephen Dean, Chairman Mobile: 07785 938782 Chris Musselle, Finance Director Mobile: 07879 412779 Seymour Pierce Limited 020 7648 8700 Sarah Wharry Cater Barnard (UK) Ltd 0870 066 0830 Melissa Gilmour Chairman's Statement On behalf of your Board I am pleased to announce a further milestone year in the development of Artisan (UK) plc into a national house builder and commercial property developer. As can be seen from the financial highlights your Company has made significant improvements in its financial standing from turnover through to profits, to cash and to increased net assets. The Company made one acquisition in the year, Rippon Homes Limited, based in Mansfield, Nottinghamshire. This transaction extends our residential and commercial development activities of the Group throughout Cambridgeshire, Hertfordshire, Warwickshire, Leicestershire, Lincolnshire and Nottinghamshire. Since my last annual statement the Company has disposed of its regional contracting businesses and its investments in property related IT internet companies, showing profits on these disposals of £1.8 million and £1.43 million respectively. The £1.8 million is not included in these financial statements as it was not completed until 14th June 2001. Artisan is now highly focused on house building and commercial property developments and intends to target the following objectives in this coming year as suitable opportunities occur. * Organic growth by opening branch offices in the south east and locating Artisan (Chiltern) Limited in mid-Hertfordshire (formerly the residential development arm of Driver Construction). * Acquisitions or joint ventures with other house builders. * At the Annual General Meeting the Company intends to ask shareholders for authority to buy back up to 20% of its shares as opportunities arise. * To attract institutional investment interest by seeking admission to the Official List (subject to suitability). The current year has opened well with house buyer and commercial interest still remaining buoyant across the whole spectrum of the Group's business activities. The Company has concluded negotiations with its partners at Living Heritage Holdings to agree both the equity and option price of the earnout entered into in 1999. The price agreed is £750,000 for the equity now owned by the Company (of which £430,000 has already been paid on account), and, should the Company so decide in the future, the option price for the remaining 50% it does not already own is fixed at a further £750,000. The price will be satisfied partly in cash and partly by the issue of up to 1,125,000 Artisan shares for the 50% currently owned. During the year to March 2001 Living Heritage Holdings made pre-tax profits of £513,000. I would like to take this opportunity of thanking the staff and managers of the Group for their continued support and loyalty and look forward to the coming year with confidence. FINANCIAL REVIEW For the year to 31st March 2001 turnover increased to £81.4m (year to 31st March 2000 £34.8m) principally as a result of full year contributions from acquisitions in 2000 and the Rippon Homes acquisition in 2001. This is an increase of 134% but more importantly Total Operating Profit, has increased by 154% to £10.6m from £4.2m. EBITDA profit has grown at a greater rate with a 166% increase to £11.6m (year to 31st March 2000 £4.4m). Shortly after the balance sheet date the regional contracting operations were sold and the scale of the activity of continuing operations is reflected in the summary of turnover and profit below. DEVELOPMENT SPECIALIST CENTRAL AND TOTAL AND PROPERTY CONTRACTING CONSOLIDATION CONTINUING ADJUSTMENTS OPERATIONS £m £m £m £m Turnover 39.5m 16.3m 1.5m 57.3m Operating Profit 8.2m 0.6m 1.3m 10.1m The discontinued operations contributed £24.1m to turnover but only £0.297m to operating profit. Share Capital During this year a total of 39.3 million new shares have been issued at an average price of 15.3p. Of these shares issued 6.4 million shares related to acquisitions from previous years, 19.6 million in respect of new investments and 13.3 million in respect of working capital. Balance sheet At the year end the group had net cash balances of £5.38m and bank and other borrowings of £22.41m representing a gearing ratio of 50% (2000:42%). New debt funding has principally been incurred to assist with the acquisition of Rippon Homes Limited. Dividends During the course of the year, your board has paid or declared three dividends. The special dividend, paid by way of Envesta plc shares in specie was distributed in August 2000. The interim dividend for the current year provided shareholders with the choice of taking further Envesta plc shares or a cash alternative. The Envesta plc option was popular with shareholders with the majority opting for shares rather than the cash alternative. The cash value of the interim dividend was 0.25p and your board proposes a final dividend of 0.35p, a cash total of 0.6p which if enhanced by the additional or alternative Envesta plc shares equates to a total dividend equivalent to 1.42p. The cash dividend is 4.3 times covered by earnings per share of 2.6p. The final dividend is payable on 2nd October 2001 to shareholders on the register at 20th July 2001. Post Balance Sheet The principal event post balance sheet event is the disposal of the regional contracting operations. The profit on disposal, net of costs, is £1.8m, which will be reflected in the 31 March 2002 results. This disposal is a significant step towards concentrating the group's activities on residential and commercial property development. The group has exited its residual investment in Envesta plc since the year end with an overall profit of £1.97m and has also disposed of the interest in enterpriseAsia.com plc. OPERATIONS REVIEW - DEVELOPMENTS Artisan (UK) Developments The year to 31 March 2001 was a great success for Artisan's commercial development operations. Office and industrial buildings of 63,000ft2 were developed and sold on the Minerva and Colmworth Business Parks, with a further 41,000 ft2 under construction at the year-end. Clarendon Road, Watford, the 24,000ft2 office development, pre-sold to Lattice Group Pension Fund, was completed in early 2001/02, and the Cardinal Business Park Development, pre-sold to Scottish Widows in the previous year, was completed on programme. In November 2000 the company purchased a site for 60,000ft2 of offices in St Albans, and total space in development and awaiting development at 31st March 2001 was in excess of 300,000ft2. On top of this development building activity a substantial profit contribution was made from land sales at Welwyn Garden City, Potters Bar, London Colney and Harpenden. Rippon Homes In December 2000 your Company purchased for £9.895 million the entire share capital of Rippon Homes Ltd, a Nottinghamshire based housebuilder that had been producing approximately one hundred homes a year and with a land bank of over three hundred units. The non-core joinery business was sold for a small profit. In the fourteen months ended 31st March 2001, the Company sold a total of one hundred and seven houses at an average price of £118,000. Planned production of homes has been increased to one hundred and twenty units for 2001/02. Artisan Property Holdings During the year Artisan Property Holdings purchased offices for resale in Central London for £3million plus two small provincial retail investments, and sold an industrial estate in London for £5.125 million and three commercial properties in Newcastle for £3.1million at satisfactory margins. Net rental income was £998,000 for the year, which substantially exceeded the interest on the mortgages raised to fund the portfolio. However, the Directors have confirmed their commitment to a policy of gradual realisation with the sale of the London offices and offices in St Albans for a combined £4.55 million, after the year-end. Living Heritage Artisan retained its 50% interest in Living Heritage Holdings Limited throughout the year and provided project finance in return for fee earnings to directly finance its development programme. During the year, Living Heritage sold twenty four units and purchased land for a further fifty two units on new sites in Birkdale, Cricklade and Tring, to add to those in Warwick, Putteridge Bury, Brackley, Codicote and Haywards Heath which were purchased in the previous year and developed during the twelve months under review to provide stock for sale in the current year. OPERATIONS REVIEW - CONTRACTING The last twelve months have been a busy period for the Contracting Division culminating in the disposal of Bickerton Construction and Driver Construction. Our efforts will now be concentrated in the specialist contracting with Speymill Contracts Limited in the leisure sector. Speymill Contracts Limited Speymill continued to expand its operation with turnover up 29% to £ 16.3million. The turnover for the Leeds office was £4.6million which is in line with last years' expectations and your Board see this as an area that will continue to expand as this regional office establishes itself in the North of England. Profits are up some 61% to £690,000. In addition, the leisure industry continues to see changes with mergers and acquisitions which suggests continued growth within this sector. The core business of Speymill Contracts remains bars, public houses, restaurants, nightclubs and hotels, and covers all aspects of construction, whether it is refurbishments, fit out of contractors' shells or new build projects. Speymill continues to develop and maintain relationships with its clients with a higher percentage of repeat business. Regular clients include the Old Monk Pub Company with Springbok concepts at Cardiff and Newquay, and several of the pub refurbishments; Yates' Wine Lodges, with their lodges at Weymouth, Woking, Margate and their flagship at Leicester Square; SFI with their Litten Tree, Bar Med and Havana concepts at Dudley, Birmingham, Altringham, Liverpool, Leeds, Macclesfield, Redditch and also their For Your Eyes Only club in Mayfair, London. Additionally, substantial projects have been carried out for Scottish and Newcastle. Two projects currently on site are a £1.8million new build, 83 bedroom Premier Lodge at Crawley and the recently completed 100 bedroom fit-out at Dover. Speymill also continue to carry out regular work for Pizza Express, Eldridge Pope Charles Wells, and have recently added Regent Inns with their Walkabout concept at Bristol and award winning Walkabout Jongeulers Comedy Club at Glasgow. Speymill Contracts is ideally suited both geographically and operationally to continue with its success in this sector. STEPHEN DEAN Chairman 9th July 2001 ARTISAN (UK) PLC GROUP PROFIT & LOSS ACCOUNT For The Year Ended 31 March 2001 31 Mar 31 Mar 2001 2000 As restated TURNOVER £ £ Continuing operations - existing 55,175,066 29,254,320 Acquisitions 2,084,838 - __________ __________ 57,259,904 29,254,320 Discontinued activities 24,104,616 5,567,197 __________ __________ Group Turnover 81,364,520 34,821,517 Group's share of associate's turnover - all (3,287,934) (4,938,078) continuing __________ ___________ 78,076,586 29,883,439 COST OF SALES (61,981,183) (22,774,159) __________ ___________ GROSS PROFIT 16,095,403 7,109,280 Administrative expenses (7,224,929) (3,409,630) Other operating income 1,540,824 44,174 __________ ___________ GROUP OPERATING PROFIT 10,411,298 3,743,824 Continuing operations - existing 9,898,791 3,605,483 Acquisitions 215,416 - __________ ___________ 10,114,207 3,605,483 Discontinued activities 297,091 138,341 __________ ___________ Group's share of operating profit of associate 256,500 467,246 Amortisation of goodwill arising on acquisition (46,030) (29,913) of associate __________ ___________ TOTAL OPERATING PROFIT 10,621,768 4,181,157 EBITDA Depreciation of tangible assets (344,479) (121,870) Amortisation of goodwill (656,700) (60,225) __________ __________ Earnings before interest, tax, depreciation, 11,622,947 4,363,252 amortisation and exceptional items __________ __________ Profit on disposal of fixed asset 287,277 754 Profit on sale of group undertaking - 104,957 Interest receivable & similar income 712,367 245,939 Interest payable (1,711,977) (401,211) __________ ___________ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 9,909,435 4,131,596 TAXATION (3,060,172) (1,264,313) __________ ___________ PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 6,849,263 2,867,283 Dividends (3,916,440) (1,066,485) __________ ___________ RETAINED FOR THE YEAR 2,932,823 1,800,798 __________ ___________ Basic Earnings per share 2.59p 2.16p Diluted earnings per share 2.58p 2.13p EBITDA Earnings per share 4.39p 3.28p ARTISAN (UK) PLC GROUP BALANCE SHEET As At 31 March 2001 31 Mar 2001 31 Mar 2000 £ £ As restated FIXED ASSETS Intangible fixed assets 14,110,245 10,350,224 Tangible fixed assets 2,433,528 2,201,466 Investment in associates 1,269,245 804,246 _________ _________ 17,813,018 13,355,936 _________ _________ CURRENT ASSETS Investments 4,157,109 622,865 Stocks & work in progress 27,385,667 24,162,108 Debtors 23,868,248 14,132,828 Cash at bank & in hand 10,941,478 3,248,199 _________ _________ 66,352,502 42,166,000 CREDITORS: Amounts falling due within one year (40,952,479) (27,571,695) _________ _________ NET CURRENT ASSETS 25,400,023 14,594,305 _________ _________ TOTAL ASSETS LESS CURRENT LIABILITIES 43,213,041 27,950,241 CREDITORS: Amounts falling due after more (9,066,568) (2,488,394) than one year Minority interests - (129,944) _________ _________ NET ASSETS 34,146,473 25,331,903 _________ _________ CAPITAL & RESERVES Called up share capital (all equity) 1,436,064 1,239,606 Share premium account 18,428,211 13,391,027 Merger reserve 9,358,749 8,710,644 Profit & loss account 4,923,449 1,990,626 _________ _________ EQUITY SHAREHOLDERS' FUNDS 34,146,473 25,331,903 _________ _________ ARTISAN (UK) PLC GROUP CASH FLOW STATEMENT For The Year Ended 31 March 2001 31 Mar 2001 31 Mar 2000 £ £ NET CASH INFLOW/(OUTFLOW) FROM 5,791,772 (6,650,535) OPERATING ACTIVITIES RETURNS ON INVESTMENTS & SERVICING OF FINANCE Interest received 712,367 245,939 Interest paid (1,711,977) (401,211) ________ ________ NET CASH (OUTFLOW) FROM RETURNS ON INVESTMENTS & SERVICING OF (999,610) (155,272) FINANCE TAXATION UK Corporation tax paid (1,006,686) (484,167) CAPITAL EXPENDITURE & FINANCIAL INVESTMENT Sale of tangible fixed assets 1,006,741 110,621 Purchase of tangible fixed assets (676,024) (195,134) ________ __________ NET CASH INFLOW/(OUTFLOW) FROM 330,717 (84,513) INVESTING ACTIVITIES ACQUISITIONS & DISPOSALS Disposal of subsidiary undertaking - 348,827 Purchase of subsidiary undertakings (11,847,585) (3,058,818) Net cash acquired with subsidiary undertaking - 310,677 Purchase of share in associate (156,479) (511,790) ________ __________ NET CASH (OUTFLOW) FROM ACQUISITIONS & DISPOSALS (12,004,064) (2,911,104) EQUITY DIVIDENDS PAID (1,061,801) (574,895) ________ __________ NET CASH OUTFLOW BEFORE FINANCING (8,949,672) (10,860,486) ________ __________ FINANCING Issue of shares 2,124,532 14,262,688 Cost of share issues (127,151) (434,429) Additions to borrowing 14,496,165 4,848,797 Debt acquired with subsidiary undertakings - (5,212,701) Capital element of finance leases 149,405 (33,446) _________ _________ NET CASH INFLOW FROM FINANCING 16,642,951 13,430,909 _________ _________ INCREASE IN CASH 7,693,279 2,570,423 _________ _________ Notes 1 PRIOR YEAR ADJUSTMENT The directors now consider that it was inappropriate, in the accounts for the year ended 31 March 2000, to write off the goodwill of £7,397,097 arising on the acquisition of Bickerton Group plc and Investment in Heritage to the merger reserve arising in respect of that acquisition. The directors believe that their stated policy in respect of goodwill should have applied, and accordingly have now restated the accounts so as to capitalise this goodwill with effect from the effective date of acquisition of 31 March 2000 and amortise it over their estimate of its useful life of 20 years. The effect of this restatement is to increase net assets and shareholders' funds at 31 March 2000 by £7,397,097. The restatement has no effect on the results for the year then ended. 2 EARNINGS PER SHARE The basic earnings per share are calculated by dividing the profit for the financial year attributable to shareholders by the weighted average number of shares in issue. In calculating the diluted earnings per share, share options outstanding have been taken into account. The EBITDA earnings per share were calculated using earnings before interest, taxation, depreciation, and amortisation. The weighted average number of shares were 31 Mar 31 Mar 2001 2000 Number Number Basic weighted average number of shares 264,919,700 133,022,474 Dilutive potential ordinary shares: Employee share options 999,338 1,317,622 ___________ ___________ 265,919,038 134,340,096 ___________ ___________ 2 The financial information set out in this document does not constitute statutory group accounts. 3 The report and accounts and accounts for the year to 31 March 2001 will be posted to shareholders shortly and, after being laid before the Annual General Meeting, will be delivered to the Registrar of Companies. 4 The Annual General Meeting will be held at Founders Hall, 1 Cloth Fair, London, EC1A 7HT at 11.30am on 4 September 2001. Copies of this announcement will be available to the public, free of charge, from the office of Seymour Pierce Ltd., 29/30 Cornhill, London, EC3V 3NF during normal office hours, with the exception of Saturdays, Sundays and bank holidays, for 14 days from today. Enquiries: Artisan (UK) plc 01480 436666 Stephen Dean, Chairman Mobile: 07785 938782 Chris Musselle, Finance Director Mobile: 07879 412779 Seymour Pierce Limited 020 7648 8700 Sarah Wharry Cater Barnard (UK) Ltd 0870 066 0830 Melissa Gilmour

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