Final Results

RNS Number : 3316A

Artisan (UK) PLC

07 October 2009

 



ARTISAN (UK) plc

PRELIMINARY RESULTS FOR THE YEAR TO 30 JUNE 2009

Artisan (UK) plc ('the Group'), the AiM listed house builder, business park developer and property investor announces its preliminary results for the year to 30 June 2009. 

Key Points:

•	Group turnover for the year reduced to £10.9m (2008: £23.4m)
•	Operating loss of £6.8m (2008: profit £1.9m)
•	Loss before tax of £8.1m (2008: profit £0.6m)
•	Residential division showing signs of improved trading during second half, but not to a level that secures profitability
•	Commercial division: benefited from forward sales achieved in previous years: some improvement towards the year end
•	Banking agreements renegotiated: reinforced cash position maintains some headroom for Group
•	Cost reduction programmes completed within the year

Michael W Stevens, Non-executive Chairman, commented:

The markets for both residential and commercial property remain difficult and fragile. Whilst an improvement in customer confidence would be welcome, the most significant improvement required is in mortgage availability. Buyers, without the significant funds required for the increased deposits necessary to obtain most mortgages currently available, need to have access to mortgages requiring lower deposits. Once this availability improves we believe the problem of downward pressure on valuations on agreed property sales will ease.

It is the Board's strong belief that the fundamental characteristic - undersupply of both residential and commercial properties in our local markets - remains strong and that once the economy is in better balance there will be a renewed strong and consistent demand for the Group's products.

Enquiries:

Artisan (UK) plc	01480 436666
Chris Musselle, Chief Executive
Bankside Consultants	020 7367 8888
Simon Rothschild/Louise Mason	Mobile: [phone]
Altium Capital Limited	0161 831 9133
Adrian Reed

CHAIRMAN'S STATEMENT

Artisan presents its results for the year ended 30 June 2009. Last year I stated that the Group faced some of the toughest trading conditions in its history in respect of the residential market. During the first half of the financial year to 30 June 2009, these tough trading conditions only became worse as the full impact of the economic difficulties on the property markets became apparent with both customer confidence evaporating and customer funding becoming very difficult to obtain. In January 2009 the underlying demand in the residential market prompted renewed customer interest, but after an initial flurry, this has continued only at a more modest level. Commercial customers for our stock items have started to re-emerge towards the end of the financial year. Despite these small signs of an upturn in the second half, volumes remain low and values depressed in the fragile market.

Group Results

Group turnover for the year reduced to £10.9m (2008 - £23.4m). The commercial business generated turnover of £2.9m (2008: £10.7m) and the residential business turnover of £7.8m (2008 - £15.1m). This much reduced level of sales has resulted in an Operating Loss of £2.5m (2008: Profit £2.2m) before exceptional items and an Operating Loss of £6.8m (2008: Profit £1.9m) after exceptional items. It should be noted that the 30 June 2008 full year results included a revaluation surplus arising on our investment properties amounting to £1.2m compared to a writedown of £0.8m in this year's accounts.

Overview

In both the first and second halves of the financial year, the markets for our residential and commercial divisions have continued to be difficult and volatile. It was with some relief that we saw a number of customers returning to the market at the beginning of 2009. This renewed interest was dampened somewhat by the great difficulty in securing mortgage funding and maintaining transactions through to completion in the face of some very cautious mortgage valuations. The initial surge from the few buyers able to fund transactions has slowed to a slightly lower but steady pace. These sales generate cash, but are not yet at a level that will secure profitable trading.

Although Artisan Developments traded reasonably well in the first half of the year, completing forward sales agreed sometime ago, sales of stock items, which are purchases made over a shorter timescale, were very poor for most of the year. Pleasingly, customer enquires improved towards the end of the financial year and stock sales and tenancies have been agreed for completions before and after the year end.

As I have previously advised, the Board foresaw the approach of tougher trading conditions and took steps to create a strong cash headroom position. The benefit of this position has been that it has allowed us to fund the trading losses and to hold funds in respect of bank demands for reduced asset debt ratios. The reduced debt ratios have been part of our successful negotiations with our bank to extend our development facility to 1 July 2011 and adopt a cash covenant in lieu of an interest to profit covenant.

Land purchases have been concentrated on seeking out option and joint venture structures rather than outright acquisitions in order to limit financial exposure.

The inherent quality of our product is of assistance in this market and we have had buyers who have preferred Artisan and Rippon Homes products to cheaper competition.

Marketing

The development divisions have continued to look for innovative ways to promote their products and to negotiate keenly on pricing. To help overcome the lack of mortgage availability to those with restricted funds, we have embarked on a programme of selling some of our lower value properties on a shared equity basis.

Stock values

We have carefully considered the pricing of all stock plots on an individual basis at both the half year and year end. Writing down values in accordance with financial standards combined with some cost increase has resulted in the exceptional losses we have disclosed in the accounts for the year ended 30 June 2009. The basis of providing these writedowns has been to reduce the carrying value to a position whereby our stock will breakeven at gross margin level where there are no future profits expected on a site.

Cost reduction programmes

The management teams have continued to look for cost savings through the year. Production has been substantially reduced with staffing levels reduced accordingly. Unfortunately, we have had to embark on redundancy programmes through the year. The staffing numbers have been reduced by approximately two thirds, but further redundancies have been avoided by virtue of most staff in the Group now working three or four day weeks. The Group Directors have recognised this contribution by staff towards cost saving and have generally agreed temporary salary reductions.

Investment Division

During the year we have not sought to increase our investment in long term property holdings. The tenants in the existing buildings appear to have settled into the new buildings well and without any significant teething problems, underlining the quality of the products we deliver to customers.

We have, as a Board, had to consider the carrying values of the properties. We are not immune to the general increase required for investment yields and we have reflected this accordingly by reducing the carrying value of the properties. This has resulted in a £0.8m charge in the Income Statement compared with the surplus of £1.2m achieved in 2008.

Dividend

Although aware that shareholders wish to see a consistent approach to dividend payments, the Board believes that is only sensible and prudent to retain funds within the business whilst we await a return to normal trading conditions and better results. Accordingly no dividend is recommended for the year.

Aspen Finance Limited

In July 2009, Aspen Finance Limited ('Aspen') a company through which I am beneficially interested in the share capital of Artisan (UK) plc made a mandatory offer to shareholders as a result of the conversion of a loan note previously issued to Aspen, increasing Aspen's shareholding to above 30%, thus triggering a mandatory offer to shareholders. As a result of the conversion and acceptances of the offer, Aspen's shareholding is now 69.6% of the voting shares of Artisan. Over 900 shareholders accepted the offer from Aspen Finance Limited. As stated in the offer document, it is Aspen's current intention to retain Artisan's admission to trading on AIM.  

Outlook

As I have already highlighted, although the markets for both residential and commercial property remain difficult and fragile, there are signs that the property markets have begun to stabilise with encouraging national market statistics now starting to emerge. Whilst continued improvement in customer confidence would be welcome, the most significant improvement required to improve outlook is in mortgage availability. Buyers need to have access to mortgages requiring lower deposits, particularly first time buyers. Once mortgage availability improves we believe the problem of downward pressure on valuations on agreed property sales will ease.

The differentiation between old properties and the improved environmental performance of new properties is becoming more marked and better recognised by clients, particularly as regards commercial property. We believe this will help drive demand for our product and we are continuing to take steps to ensure that our products meet the exacting demands of the market and that of new legislation.

We also believe that debt funding for the business will become tighter as debt providers seek to reduce debt levels, apply less flexible funding structures and reduce the loan to cost and loan to value ratios. We do retain a positive relationship with our bankers and have their assurance that they wish work with us in providing facilities beyond the existing term for the main development facility. Our business is well backed with valuable assets which we expect to be better appreciated by the market as more normal conditions return.

As stated in the Aspen offer document, it is the Group's intention to review the existing operations and assess future opportunities for growth. Such opportunities may include the use of Artisan as a platform to expand either the Group's residential or commercial property activities, organically or via acquisitions. Shareholders should be aware that this may require additional debt or equity funding, the form of which cannot currently be predicted and may lead to future shareholder dilution.  

It is the Board's strong belief that the fundamental characteristic of property development, undersupply of both residential and commercial properties in our local markets, remains strong and that once the economy is better in balance there will be a renewed strong and consistent demand for the Group's product.  

Michael W Stevens

Chairman

6 October 2009

OPERATIONAL AND FINANCIAL REVIEW

Residential Division

Whilst Rippon Homes found the year ended 30 June 2008 a difficult year, 2009 proved even more challenging and potential sales reservations have been hard to find. The difficulties in completing mortgage financing and the very cautious approach of valuers has reduced the number of firm reservations and sales achievable. Sales of 41 units at an average value of £189,650 (2008 - 80 units at an average value of £186,300) is reflective of the current market conditions across the housebuilding sector. The increase in average price reflects the product offer mix and would have been further improved but for the treatment of shared equity sales as referred to below. Rippon Homes have where possible ensured that four bedroom properties have been offered and sales of these products have been achieved as customers have been able to use equity in their existing properties to meet the restricted mortgage provision.

Rippon Homes has continued to use a wide variety of sales incentives. Much of the promotion has focused on the availability of homes at prices discounted from list price and the availability of part exchange properties. The ability to deal in part exchange properties has been very useful in maintaining sales. Part exchange stocks have been carefully managed to avoid creating an overstock of these properties. At the year end Rippon Homes had a stock of 14 units, which was below the management allowance for part exchange stocks. However as there is a time lag between agreeing a part exchange deal on a new house and the eventual sale, in a falling market this has incurred losses. We have also an exceptional provision against the closing stock at 30 June 2009 of £175,000

We have also started selling houses on a shared equity basis to assist customers who cannot raise the equity required to secure a mortgage. By 30 June 2009 we had completed 2 units on this basis and more will follow in the next financial year. The accounting treatment requires that the estimated implied interest cost of deferring part of the sale value is deducted from turnover. In the current year this is not material, but does depress the turnover figure and reduce the average sale value. If 100% of the sale value was recognised, turnover would increase by £30,500 and the average sale value would be £190,400. Rippon Homes has the benefit of a second charge on the property until the deferred share of the property is settled, ordinarily in up to 10 years.

Finished good stocks increased over the first part of the financial year whilst units in build were brought to completion or near completion. Production is now on a limited basis and being managed in response to sales. Finished good stocks are now declining and are expected to continue to be reduced over the coming year. However it is a finely balanced management decision, as Rippon Homes requires sufficient units in production to ensure that there is a balanced portfolio available for future sales. In the current market it is unlikely that sales can be achieved on units that are not either nearing completion or complete.

Commercial Division

The commercial division has suffered from the realities of the current market. The turnover achieved has largely been on the strength of previously agreed forward sales. However, towards the end of the financial year there has been increased interest in our stock units resulting in two freehold sales of previously let units in June. We achieved a further sale of an office unit immediately after the year end. Sales interest is continuing into the current financial year. Although we are achieving lower sale prices and shorter let terms than ideal, the financial performance of the sites indicates that no carrying value provisions are appropriate.

New build is currently suspended and will only be re-started once the Board sees more progress in realising existing stock or on the strength of a forward sale or let contract. The construction team has been very significantly reduced and the remaining staff are not only dealing with the ongoing maintenance issues and technical support for sales enquiries, but investigating changes to our standard product to better meet the evolving environmental requirements of customers and regulators.

The commercial business sold 11,700ft2 of commercial property (2008: 98,000ft2), consisting of 11,700ft2 of completed stock units (2008: 18,000ft2) and nil ft2 of forward sales contracted and in build (2008: 80,000ft2). In 2009 revenue was also derived from forward sales contracted in the previous year.

Investment Properties

As stated in the Chairman's statement, the investment properties continue to be occupied by the tenants and Artisan itself. The property investment market has reflected the current economic conditions and seen an increase in investment yields. Therefore, as at the half year, the Board has considered the carrying value of the properties and after informal consultation with valuers, we have decided to reduce the carrying value by a further £300,000 at the year end culminating in a total charge to income of £750,000 for the year to 30 June 2009 (2008: surplus £1,207,000).

Whilst we are concentrating on maintaining cash balances through the Group, we have not invested in any further long term investment properties. Any lettings achieved by the trading divisions have been regarded as short term steps prior to achieving a sale of the investment.  

Land stocks

We have not made any further land purchases other than the completion of the purchase of the second half of Rippon Homes' Debdale Lane site at the beginning of the financial year. Our management teams have concentrated in seeking option or deferred purchase schemes. A number of these are in progress.

The land stock of owned or secured plots at Rippon Homes is 260 plots (2008: 378). Part of the reduction arises from a site of 52 units that is contracted but subject to agreement on valuation. It is not clear whether or not this site will now proceed and is therefore excluded from the plot number declared for 30 June 2009.

The Commercial operation currently holds land, owned or secured of 18,500m2 (2008: 25,300m2). 6,500m2 of the reduction relates to a contracted site that management decided during the year not to purchase. Control of land is a key requirement of generating forward sales and lets and it is the intention of management to secure forward sales as an integral part of achieving future growth.  

Results

	Residential £m	Commercial £m	Investment £m	Central £m	Total £m
Revenue 2009	7.8	2.9	0.3	(0.1)	10.9
2008	15.1	10.7	0.2	(2.6)	23.4
Operating (Loss)/Profit before group management charges and exceptional items
2009	1.4	-	(0.5)	(3.4)	(2.5)
2008	0.3	1.7	1.5	(1.3)	2.2

The divisional analysis of operating (loss)/profit is before Group management charges and exceptional costs. The central column deducts from turnover the inter segment trading.

The tax credit for the year is £27,000 resulting in an effective tax rate of 0.3% (2008:18.5%). The reduction to standard rate is primarily a result of unrelieved trading losses carried forward for which no deferred tax asset has been recognised and a lack of tax relief on the goodwill impairment.

The exceptional items may be analysed as follows:

	2009	2008
	£m	£m
Goodwill impairment	2.5	-
Staff reduction costs	0.1	0.1
Land contract withdrawal	0.1	-
Residential land provisions	1.4	0.3
Part exchange stock write downs	0.2	-
Total	4.3	0.4

The net assets have reduced from £21.4m to £15.3m as a result of the trading losses for the year and exceptional items including goodwill impairment.  

Share capital has increased in the year as a result of the conversion of the convertible loan note of £1.75m issued to Aspen Finance Limited in August 2008. 5,128,205 new shares were issued at a conversion price of 34.125p which reflected the market price of the Company's shares at the date of issue of the loan note. The share price was 39.50p at the date of conversion, and this is the fair value of the conversion for the purposes of the financial reporting standards.  

Debt and Banking

The Group has net borrowings of £20.8m (2008: £19.7m). The Group has drawn bank debt of £29.9m (2008: £32.6m) resulting in substantial cash balances which, although reduced, provide funds for continuing trading and debt reduction. Trading conditions resulted in the Group breaching its EBIT to interest covenant at 31 December 2008. Since then the banking facilities have been renegotiated and new terms agreed in respect of the development facilities. The development facility was extended to 1 July 2011. The terms of the investment property loan are also expected to be varied after the year end as our bank seeks to reduce the level of debt provided by varying the loan to value terms and also seeks to increase its margins. 

Our revised development bank facility is split between a LIBOR based facility and a base rate based facility. The base rate interest margin was adjustable to reflect the LIBOR based cost of funding, but this element of the facility allows positive bank balances in the Group to be offset against drawdown funds for the purposes of interest calculation allowing for an effective management of funding. The renegotiated margins at the year end are Base Rate plus 3.25% and LIBOR plus 2.25% for the respective sub-divisions of the development loan. We have agreed with our bank that the Interest to EBIT covenant is replaced by a cash covenant; a more appropriate control in these difficult markets. The cash covenant requires Artisan to maintain, on a rolling quarterly basis, a minimum 1 to 1 ratio in respect of cash receipts to payments (excluding loan repayments). The gearing ratio is now 135.6%, (2008: 91.9%).

On 1 August 2008 the Group issued a convertible loan note to Aspen Finance Limited raising £1.75m before costs. As disclosed in this report and accounts Michael W Stevens has a beneficial interest in the shares held by Aspen Finance Limited. As has been already stated, this loan note was converted into share capital in June 2009.

As a result of converting the Loan Notes, Aspen acquired 30% or more of the voting rights in relation to the Company, which obliged Aspen Finance Limited to make a mandatory offer to other shareholders to acquire their shares in accordance with Rule 9 of the Takeover Code.

Work in Progress

Work-in-progress has reduced from £39.1m to £33.7m, reflecting the exceptional provisions and a build slow down in both divisions compared with sales. The key management issue is to maintain sufficient but not excessive stocks of product available for purchase. The nature of the residential market is that most customers are able to choose from available competing product, and therefore a reasonable and varied selection of product across sites is required. This is also true of many commercial customers, particularly for our smaller premises.  

It is the sales to customers at short notice where we are seeing some renewed enthusiasm rather that in the forward sale market and we have finished product available to meet customer demands which is providing cash receipts to fund ongoing costs.

Chris Musselle

Chief Executive

6 October 2009

ARTISAN (UK) PLC

GROUP INCOME STATEMENT

For The Year Ended 30 June 2009

	Note	Year ended 30 June 2009	Year ended 30 June 2008
		£	£
REVENUE		10,926,592	23,412,951
COST OF SALES
Before exceptional items		(10,172,288)	(20,064,578)
Exceptional items	3	(1,684,184)	(308,214)
Cost of sales		(11,856,472)	(20,372,792)
		__________	__________
GROSS (LOSS)/PROFIT
Before exceptional items		754,304	3,348,373
Exceptional items	3	(1,684,184)	(308,214)
GROSS (LOSS)/PROFIT		(929,880)	3,040,159
Other operating income		343,345	475,946
Administrative expenses
Before exceptional items		(2,846,302)	(2,782,470)
Exceptional items	3	(2,610,124)	(41,399)
Administrative expenses		(5,456,426)	(2,823,869)
		__________	__________
		(6,042,961)	692,236
Revaluation (deficit)/surplus on investment properties	6	(750,412)	1,207,111
		__________	__________
OPERATING (LOSS)/PROFIT
Before exceptional items		(2,499,065)	2,248,960
Exceptional items	3	(4,294,308)	(349,613)
OPERATING (LOSS)/PROFIT		(6,793,373)	1,899,347
Finance income		29,279	13,893
Finance expense		(1,301,189)	(1,323,007)
		__________	__________
(LOSS)/PROFIT BEFORE TAXATION
Before exceptional items		(3,770,975)	939,846
Exceptional items	3	(4,294,308)	(349,613)
(LOSS)/PROFIT BEFORE TAXATION		(8,065,283)	590,233
Tax credit
Before exceptional items		12,823	88,061
Exceptional items	3	14,602	20,961
Tax credit		27,425	109,022
		__________	__________
(LOSS)/PROFIT FOR THE YEAR ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT
Before exceptional items		(3,758,152)	1,027,907
Exceptional items	3	(4,279,706)	(328,652)
(LOSS)/PROFIT FOR THE YEAR ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT		(8,037,858)	699,255
		__________	__________
Basic and diluted (loss)/earnings per share	5	(97.21)p	8.53p
		__________	__________

ARTISAN (UK) PLC

GROUP STATEMENT OF CHANGES IN EQUITY

			Share				Capital						Own
	Share		premium		Merger		redemption		Revaluation		Retained		shares
	capital		account		reserve		reserve		reserve		earnings		held		Total
	£		£		£		£		£		£		£		£
At 1 July 2007	1,642,650		10,356,683		515,569		91,750		-		8,272,598		(19,065)		20,860,185
Revaluation of owner occupied property and net income recognised directly in equity	-		-		-		-		74,840		-		-		74,840
Profit for the year	-		-		-		-		-		699,255		-		699,255
Total recognised income and expense for the year	-		-		-		-		74,840		699,255		-		774,095
Dividends paid	-		-		-		-		-		(221,364)		-		(221,364)
Credit in respect of employee share schemes	-		-		-		-		-		22,572		-		22,572
At 30 June 2008	1,642,650		10,356,683		515,569		91,750		74,840		8,773,061		(19,065)		21,435,488
Revaluation of owner occupied property and net income recognised directly in equity	-		-		-		-		(46,796)		-		-		(46,796)
Loss for the year	-		-		-		-		-		(8,037,858)		-		(8,037,858)
Total recognised income and expense for the year	-		-		-		-		(46,796)		(8,037,858)		-		(8,084,654)
Dividends paid	-		-		-		-		-		(61,490)		-		(61,490)
Issue of shares	1,025,641		1,000,000		-		-		-		-		-		2,025,641
Credit in respect of employee share schemes	-		-		-		-		-		10,188		-		10,188
At 30 June 2009	2,668,291		11,356,683		515,569		91,750		28,044		683,901		(19,065)		15,325,173

ARTISAN (UK) PLC

GROUP BALANCE SHEET

As at 30 June 2009

Company Number : 3630998		30 June 2009	30 June 2008
		£	£
ASSETS
Non-current assets
Intangible assets		-	2,454,760
Investment properties	6	3,397,438	4,147,850
Property, plant and equipment		833,517	955,039
Other receivables		393,245	394,634
		__________	__________
		4,624,200	7,952,283
		__________	__________
CURRENT ASSETS
Inventories		33,724,507	39,101,427
Trade and other receivables		678,405	1,118,454
Current tax recoverable		19,118	99,733
Cash and cash equivalents		1,396	1,497
		__________	__________
		34,423,426	40,321,111
		__________	__________
Total assets		39,047,626	48,273,394
		__________	__________
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings		(19,441,807)	(19,704,561)
		__________	__________
Current liabilities
Trade and other payables		(2,502,802)	(6,689,273)
Interest bearing loans and borrowings		(1,333,772)	-
Provisions		(444,072)	(444,072)
		__________	__________
		(4,280,646)	(7,133,345)
		__________	__________
Total liabilities		(23,722,453)	(26,837,906)
		__________	__________
NET ASSETS		15,325,173	21,435,488
		___ __ ____	___ __ ____
EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT COMPANY
Called up share capital		2,668,291	1,642,650
Share premium account		11,356,683	10,356,683
Merger reserve		515,569	515,569
Capital redemption reserve		91,750	91,750
Revaluation reserve		28,044	74,840
Retained earnings		683,901	8,773,061
Own shares		(19,065)	(19,065)
		__________	__________
TOTAL EQUITY		15,325,173	21,435,488
		___ __ ____	___ __ ____

ARTISAN (UK) PLC

GROUP CASH FLOW STATEMENT

For The Year Ended 30 June 2009

	Note	Year ended  30 June 2009	Year ended  30 June 2008
		£	£
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit before taxation		(8,065,283)	590,233
Goodwill impairment charge		2,454,760	-
Depreciation		64,145	69,909
Finance income		(29,279)	(13,893)
Finance expense		1,301,189	1,323,007
Share based payments charge		10,188	22,572
Loss/(profit) on disposal of property, plant and equipment		2,267	(1,281)
Revaluation deficit/(surplus) on investment properties		750,412	(1,207,111)
Profit on sale of investment property		-	(145,537)
		__________	__________
Operating (loss)/profit before changes in working capital and provisions		(3,511,601)	637,899
Decrease/(increase) in inventories		5,376,920	(4,308,866)
Decrease/(increase) in trade and other receivables		441,438	(35,046)
Decrease in trade and other payables		(4,050,322)	(1,227,624)
		__________	__________
Cash used by operations		(1,743,565)	(4,933,637)
Finance income received		29,279	13,893
Finance costs paid		(1,161,697)	(1,293,597)
Tax received/(paid)		108,040	(514,238)
		__________	__________
Net cash used in operating activities		(2,767,943)	(6,727,579)
		__________	__________
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(4,186)	(44,387)
Capital expenditure on investment properties		-	(2,449,981)
Proceeds from sale of investment property		-	490,538
Proceeds from sale of property, plant and equipment		12,500	1,528
		__________	__________
Net cash from/(used) in investing activities		8,314	(2,002,302)
		__________	__________
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid		(61,490)	(221,364)
Proceeds from the issue of ordinary share capital		1,750,000	-
Movement on borrowings		1,071,018	8,951,616
		__________	__________
Net cash flow from financing activities		2,759,528	8,730,252
		__________	__________
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(101)	371
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR		1,497	1,126
		__________	__________
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		1,396	1,497
		___ __ ____	___ __ ____

Notes

1	Basis of preparation
	The financial statements included in this preliminary announcement have been prepared using recognition and measurement principles consistent with those of International Financial Reporting Standards ('IFRS') issued by the International Accounting Standards Board as endorsed by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
	The financial statements are presented in pounds sterling and have been prepared on the going concern basis. The Group has prepared forecasts which have been reviewed by the directors, based on estimates and judgements of the market conditions faced by the Group, including residential and commercial demand, customer funding availability, selling prices and the levels of finance available. Many factors will influence customer demand including interest rates, the perception of bank funding availability and stability, employment prospects and the overall level of economic activity in the UK economy. The directors consider that these forecasts demonstrate an adequate level of headroom for the next 12 months over the available funding and minimum covenant levels in the Group's revised bank facility agreements. The Board has also previously announced the potential for further debt or equity raising to aid the growth of the Group. Accordingly the Board has adopted the going concern basis for preparation of these financial statements.
	Accounting policies have been applied consistently to all periods presented in the consolidated financial statements
2	Status of financial information
	The financial information contained in this preliminary announcement does not constitute the Company's consolidated statutory financial statements for the years ended 30 June 2009 and 2008, but is derived from those financial statements. The financial statements for the year ended 30 June 2008 have been delivered to the Registrar of Companies. The financial statements for the year ended 30 June 2009 will be delivered following the Company's Annual General Meeting. The auditors have reported on those financial statements; their reports were unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.
	The annual report and financial statements will be posted to shareholders who have elected to receive a printed copy on 6 October 2009. Copies of the annual report and financial statements will also be available from the Company's website at www.artisan-plc.co.uk or the Company Secretary, Artisan (UK) plc, Vantage House, Vantage Park, Washingley Road, Huntingdon, Cambridgeshire, PE29 6SR.
3	Exceptional items
	2009 2008 £ £ Costs charged to cost of sales Inventory impairment charge 1,594,012 272,247 Redundancy costs - 35,967 Withdrawal from land purchase contracts 90,172 - Total costs charged to cost of sales 1,684,184 308,214 Costs charged to administrative expenses Goodwill impairment charge 2,454,760 - Redundancy costs 147,683 41,399 Costs of liquidating group undertaking 7,681 - Total costs charged to administrative expenses 2,610,124 41,399 Total exceptional costs 4,294,308 349,613
	The exceptional items reflect the actions taken in response to a significant deterioration in market conditions. These actions include write downs to the carrying value of inventories to net realisable value, a goodwill impairment charge, aborted costs following the withdrawal from land purchase contracts and redundancy costs resulting from a reduction in headcount across the Group. The costs of liquidation of group undertaking relate to the winding up of a dormant overseas subsidiary.
4	Dividends
	Amounts paid to equity holders in the year: 2009 2008 £ £ Final dividend for the year ended 30 June 2008 of 0.75p  (2007 - 1.5p) per share 61,490 122,980 Interim dividend for the year ended 30 June 2009 of Nil p  (2008 - 1.2p) per share - 98,384 61,490 221,364
	The Directors do not propose to pay a final dividend for the year (2008 - 0.75p per ordinary share).
5	Earnings per share
	The basic earnings per share is calculated by dividing the profit after taxation by the weighted average number of shares (excluding treasury shares) in issue.
	The weighted average number of shares (excluding treasury shares) were:
	2009 2008 Number Number Basic weighted average number of shares (excluding treasury shares) 8,268,907 8,198,658
	There were no dilutive potential ordinary shares in 2009 or 2008.
6	Investment property
	Fair value
	Year ended Year ended 30 June 2009 30 June 2008 £ £ At beginning of year 4,147,850 1,515,897 Additions - capital expenditure - 2,238,753 Transfer to property, plant and equipment in respect of owner  occupied property - (468,910) Disposals - (345,001) 4,147,850 2,940,739 Revaluations included in income statement (750,412) 1,207,111 At end of year 3,397,438 4,147,850
	As at 30 June 2009, the historical cost of investment property owned by the Group was £2,779,931 (2008 ߛ £2,779,931).
	The fair values of the Group's investment properties at 30 June 2009 have been arrived at on the basis of open market value by the directors, who are suitably experienced and having regard to professional advice.
	During the year £294,334 (2008 - £123,777) was recognised in the income statement as revenue in respect of rental income from investment properties. Direct operating expenses arising from investment properties amounted to £15,106 (2008 - £2,200).
7	The Annual General Meeting will be held at the offices of Altium Capital Limited, 30 St James's Square, London, SW1Y 4AL on 24 November 2009 at 12.00 pm.

Copies of this announcement will be available to the public, free of charge, from the offices of Altium Capital Limited, 5 Ralli Courts, West Riverside, Manchester M3 5FT during normal office hours, with the exception of Saturdays, Sundays and bank holidays, for 14 days from today.

 

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