Prelim Results

Artisan (UK) PLC 29 July 2002 EMBARGOED RELEASE: 0800 HOURS, 29 JULY 2002 ARTISAN (UK) plc (AIM) (House builder & commercial property developer) PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2002 HIGHLIGHTS Key points: • Profit before interest, taxation and goodwill £7.3m (£11.6m for the year to 31st March 2001) • Earnings per share before interest, taxation and goodwill 2.6 pence (4.4 pence per share for the year to 31st March 2001) • Recommended final dividend of 0.15p per share • Dividend per share 0.4 pence for the year to 31 March 2002 (0.6 pence per share for the year to 31st March 2001) Commenting on the results, Artisan's Chairman Stephen Dean said: ' During the year we have undertaken and carried out an evaluation of the Group's activities, which has resulted in a number of disposals and a goodwill write down of £18.8m. We are now focusing on a smaller number of key larger operating companies specialising in both commercial and residential property development.' Enquiries: Hansard Communications 020 7735 9415 Adam Reynolds Mobile: 07785 908158 Takki Sulaiman Mobile: 07778 419218 Seymour Pierce Limited 020 7648 8700 Sarah Wharry Artisan (UK) plc 01480 436666 Stephen Dean, Chairman Martyn Freeman, Chief Executive Chris Musselle, Finance Director ARTISAN (UK) PLC CHAIRMAN'S STATEMENT During the year we have undertaken and carried out an evaluation of the Group's activities, which has resulted in a number of disposals culminating in that of the Speymill Contracts business. The year to 31 March 2002 saw strong performances from both our commercial and residential property development business and in particular there has been a strong contribution from Rippon Homes. As reported at the interim stage, we had experienced serious difficulties with Living Heritage as an independently managed associate business of the Artisan Group. Although this substantially impacted upon our year end results I am pleased to report that the Board have implemented strategic management changes bringing Living Heritage under the direct control of the Artisan Group's management. The results for this period prior to goodwill, taxation and interest show a profit of £7.31m on turnover of £59.46m. During the year Artisan bought back 5.85m shares of its issued share capital with a further 13.35m purchased shortly after the year end. These in total reduced the issued share capital by nearly 7%. The Directors will be recommending a final dividend for the year to 31 March 2002 of 0.15p, which is subject to shareholders approval at the Annual General Meeting of the Company. As announced in May, I am delighted to welcome both Michael Stevens and John Hemingway to the Board as non-executive Directors and the appointment of Martyn Freeman as Chief Executive. With their considerable expertise and experience within the property sector, I believe that together, they will add significantly to the future development of the Group. The future strategy of the Group will be to concentrate primarily on larger scale commercial and residential developments both in the UK and Europe to generate the growth expected by our shareholders from the Company's potential. Following these changes and with emphasis on the future growth strategy of the Group, the Board has reviewed the goodwill accumulated on the balance sheet, with the result that there should be a write off of all goodwill carried except for that related to the Rippon Homes business, which amounts to £2.94m. As a result the balance sheet value will be more in line with the market capitalisation of the Group. As a consequence we have written down goodwill by £18.8m and therefore the pre goodwill profit before interest and taxation of £7.31m becomes a loss of £12.2m before interest and taxation. After four years as Chairman of Artisan (UK) plc, I have decided to retire following the Annual General Meeting. However to allow for an orderly succession I have today stepped down as Chairman and I am delighted to announce that Michael Stevens is the Company's new Chairman. The Board look to the future with confidence and I would like to take this opportunity to thank all of our staff for their dedication and efforts throughout this financial year. Stephen Dean Chairman 29 July 2002 OPERATIONS REVIEW Commercial Development and Property During the year Artisan (UK) Developments sold a further 40,000ft(2) of office and industrial units on its business parks in Peterborough, St Neots and St Ives and sold a 2 acre site to Whitbread Plc for development as an hotel and leisure complex. To replace its land stocks, the Company has purchased eight acres of land for two new business parks in Huntingdon and Peterborough, on which we have started development works, together with the three acre St Albans site purchased last year. These three new sites will provide over 150,000ft(2) of new office development to add to the 175,000ft(2) still to be developed on the Colmworth Business Park and the 20,000ft(2) of property in stock and under development. The 24,000ft(2) office block in Watford previously pre-sold by Gryphon Developments plc, was completed early in the year and let to Citibank, releasing the balance of the purchase price shortly after the financial year end. £3.6m was raised from the sale of 80,000ft(2) of offices in Sheffield and Halifax together with two small retail properties in Ripley and Cromer. A further £0.5m secured second tranche is receivable within two years. Since the year end the Company has taken the opportunity to convert £860,000 of Loan Note and accrued fees and interest against the part cost of some newly developed commercial property in Spain valued for the company at I2.17m (approx £1.4m). Residential Development The consolidation of the Company's housing activities has now been completed, with residential development now centred on Rippon Homes with Living Heritage integrated as its Premium brand division. The residual house building activity in East Anglia previously undertaken by Artisan (UK) Developments has now been completed allowing the Group to concentrate its investment more effectively in the less volatile and lower land cost markets in the Midlands. Rippon Homes sold 115 houses during the year. The landbank surplus acquired when we purchased the Company last year has been developed out, resulting in the year being particularly profitable, and by the year end the land purchase programme for 2002/03 had already commenced with new sites at Rainworth and Mansfield under contract and three further site purchases in Nottinghamshire and Derbyshire agreed with the landowners. Our original 50% investment in Living Heritage was made in 1999, under an agreement for the vendors to retain management control under a profits earn-out structure until 2002. However, your Board was unhappy with both the control of development and rate of sales, and the weak financial management, and therefore took control of Living Heritage in October 2001 making appropriate loss provisions to allow it to trade profitably in the future. The management team has been changed and costs drastically reduced. New control systems were introduced and the original activity of converting older properties phased out as Living Heritage was re-positioned as a specialist division alongside Rippon Homes. As at 31 March 2002 the delayed Living Heritage conversion projects were virtually all completed with a consequential high level of finished but unsold stocks at the balance sheet date. Since the year end the new management team have succeeded in substantially reducing these stocks and the associated bank debt through increased sales levels. Martyn Freeman Chief Executive 29 July 2002 FINANCIAL REVIEW For the year to 31 March 2002 Group turnover reduced to £63.3m (year to 31 March 2001 £81.4m) principally as a result of the disposal of the regional contracting operations. Profit before interest and goodwill has decreased to £7.3m (year to 31 March 2001 £11.6m). The goodwill impairment review has turned the profit before interest into a loss of £12.2m before interest and taxation, but will reduce the ongoing amortisation charge by £992,000 per annum. Following the disposal of the regional contracting businesses earlier in the year and the sale of Speymill just prior to the year end, the group's continuing operations comprise residential and commercial development activity and some property investment interest. A total of £4.3m profit has been derived from the sale of contracting subsidiaries during the year. Of the consideration £1.5m remains outstanding as debt due to Artisan. RESIDENTIAL COMMERCIAL PROPERTY CENTRAL TOTAL CONTINUING OPERATIONS £m £m £m £m £m Turnover 26.4 6.8 8.8 0.3 42.3 Operating Profit excluding goodwill 1.7 2.0 0.3 (1.1) 2.9 Therefore the continuing turnover and profit is now derived almost entirely from residential and commercial property development. The profits for the forthcoming financial year will not benefit from the level of profits derived from disposals in the current year. The future profit levels will also be affected by the cyclical nature of development activity in the group. Artisan is currently investing in new projects which should generate a profitable return on equity in future years. Share capital During the year there have been no shares issued other than those exercisable under the approved share option scheme and a total of 5.85 million shares have been repurchased at an average price of 7.55p. Balance sheet At the year end the group had net cash balances of £0.4m and bank and other borrowings of £23.3m representing a gearing ratio of 119.8%. However since 31 March 2001 the Artisan balance sheet has been reduced by the goodwill write down and at the balance sheet date we have assumed £8.5m of debt arising from the consolidation of Living Heritage. Without these two items, the gearing ratio would have been less than the 2001 ratio of 50%. Living Heritage Developments and its subsidiaries had always carried very high gearing as an individual group. The Artisan debt level is relatively high but will be reduced substantially as the stock of Living Heritage properties continues to be sold. A further £1.7m of debt has been repaid from Living Heritage sales since the balance sheet date. Goodwill As a consequence of the results and changes through the year and those currently envisaged, the Board has undertaken an impairment review. This follows the difficulties encountered with Living Heritage, the consequential effects thereof and the cessation of other specific areas of activity. The result is an exceptional write down amounting to £18.8m in the year. The amortisation savings in future years will enhance reported profitability and the now lower net asset value is both closer to the market value of Artisan and the value attributed by most financial analysts when assessing the balance sheet. Dividends During the course of the year, your board has paid an interim dividend of 0.25p and recommends a final dividend of 0.15p subject to approval by shareholders at the Annual General Meeting of the Company. The total dividend is over five times covered by earnings per share, before goodwill, of 2.10p. The final dividend will be payable on 2 October 2002 to shareholders on the register at 9 August 2002. The dividend is lower than last year and reflects the lower profit achieved compared with last year. Post balance sheet The principal post balance sheet event is the purchase under the share buyback authority of a further 13.35m Artisan (UK) plc shares at an average price of 8.625p. Chris Musselle Finance Director 29 July 2002 ARTISAN (UK) PLC GROUP PROFIT & LOSS ACCOUNT For The Year Ended 31 March 2002 31 Mar 2002 31 Mar 2001 Excluding Including Excluding Including Goodwill goodwill goodwill goodwill TURNOVER £ £ £ £ Continuing operations - existing 42,272,870 42,272,870 40,934,030 40,934,030 Discontinued activities 21,020,006 21,020,006 40,430,490 40,430,490 __________ __________ __________ __________ Group Turnover 63,292,876 63,292,876 81,364,520 81,364,520 Group's share of associate's turnover - (3,830,789) (3,830,789) (3,287,934) (3,287,934) all continuing __________ __________ __________ __________ 59,462,087 59,462,087 78,076,586 78,076,586 COST OF SALES (49,776,974) (49,776,974) (61,981,183) (61,981,183) __________ __________ __________ __________ GROSS PROFIT 9,685,113 9,685,113 16,095,403 16,095,403 Administrative expenses (6,267,124) (7,007,097) (6,614,259) (7,224,929) Other operating income 83,116 83,116 1,540,824 1,540,824 Goodwill write down (exceptional) - (18,755,120) - - __________ __________ __________ __________ GROUP OPERATING PROFIT/(LOSS) 3,501,105 (15,993,988) 11,021,968 10,411,298 Continuing operations - existing 2,871,297 (16,623,796) 9,813,058 9,202,388 Discontinued activities 629,808 629,808 1,208,910 1,208,910 Group's share of operating profit/(loss) (600,257) (600,257) 256,500 256,500 of associate Amortisation of goodwill arising on acquisition of associate - (41,424) - (46,030) __________ __________ __________ __________ TOTAL OPERATING PROFIT/(LOSS) 2,900,848 (16,635,669) 11,278,468 10,621,768 Profit on disposal of fixed asset 73,414 73,414 287,277 287,277 Profit on sale of group undertaking 4,295,208 4,295,208 - - Income from current asset investments 37,485 37,485 - - __________ __________ __________ __________ 7,306,955 (12,229,562) 11,565,745 10,909,045 Interest payable (858,729) (858,729) (1,711,977) (1,711,977) Interest receivable & similar income 261,695 261,695 712,367 712,367 __________ __________ __________ __________ PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 6,709,921 (12,826,596) 10,566,135 9,909,435 TAXATION (696,854) (696,854) (3,060,172) (3,060,172) __________ __________ __________ __________ PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION 6,013,067 (13,523,450) 7,505,963 6,849,263 Dividends (1,059,450) (1,059,450) (3,916,440) (3,916,440) __________ __________ __________ __________ RETAINED FOR THE YEAR 4,953,617 (14,582,900) 3,589,523 2,932,823 __________ __________ __________ __________ Basic Earnings per share 2.10p (4.72p) 2.83p 2.59p Diluted earnings per share 2.10p (4.72p) 2.82p 2.58p ARTISAN (UK) PLC GROUP BALANCE SHEET As at 31 March 2002 31 Mar 2002 31 Mar 2001 £ £ FIXED ASSETS Intangible fixed assets 2,942,158 14,110,245 Tangible fixed assets 894,642 2,433,528 Investment in associates - 1,214,245 _________ _________ 3,836,800 17,758,018 _________ _________ CURRENT ASSETS Investments 811,056 4,157,109 Stocks & work in progress 33,199,625 27,385,667 Debtors 16,788,113 23,868,248 Cash at bank & in hand 355,049 5,375,378 _________ _________ 51,153,843 60,786,402 CREDITORS: Amounts falling due within one year (28,035,356) (35,331,379) _________ _________ NET CURRENT ASSETS 23,118,487 25,455,023 _________ _________ TOTAL ASSETS LESS CURRENT LIABILITIES 26,955,287 43,213,041 CREDITORS: Amounts falling due after more than one year (7,804,014) (9,066,568) _________ _________ NET ASSETS 19,151,273 34,146,473 _________ _________ CAPITAL & RESERVES Called up share capital (all equity) 1,411,064 1,436,064 Share premium account 18,428,211 18,428,211 Merger reserve 515,569 9,358,749 Capital redemption reserve 25,000 - Profit & loss account (1,228,571) 4,923,449 _________ _________ EQUITY SHAREHOLDERS' FUNDS 19,151,273 34,146,473 _________ _________ ARTISAN (UK) PLC GROUP CASH FLOW STATEMENT For The Year Ended 31 March 2002 31 Mar 2002 31 Mar 2001 £ £ NET CASH INFLOW FROM OPERATING ACTIVITIES 1,496,250 5,791,772 RETURNS ON INVESTMENTS & SERVICING OF FINANCE Interest received 261,695 712,367 Interest paid (858,729) (1,711,977) Dividends received 37,485 - ________ ________ NET CASH (OUTFLOW) FROM RETURNS ON INVESTMENTS & SERVICING OF FINANCE (559,549) (999,610) TAXATION UK Corporation tax paid (535,156) (1,006,686) CAPITAL EXPENDITURE & FINANCIAL INVESTMENT Sale of tangible fixed assets 896,163 1,006,741 Purchase of tangible fixed assets (401,397) (676,024) ________ ________ NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES 494,766 330,717 ACQUISITIONS & DISPOSALS Disposal of subsidiary undertaking 5,714,818 - Purchase of subsidiary undertakings (552,692) (11,847,585) Net cash disposed with subsidiary undertakings (39,027) - Purchase of share in associate - (156,479) ________ ________ NET CASH INFLOW/(OUTFLOW) FROM ACQUISITIONS & DISPOSALS 5,123,099 (12,004,064) EQUITY DIVIDENDS Dividends paid (656,156) (1,061,801) ________ __________ NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 5,363,254 (8,949,672) ________ __________ FINANCING Issue of shares - 2,124,532 Cost of share issues - (127,151) Share buy back (412,300) - Movement in borrowing (9,985,501) 10,382,092 Capital element of finance leases 14,218 149,405 __________ _________ NET CASH (OUTFLOW)/INFLOW FROM FINANCING (10,383,583) 12,528,878 __________ _________ (DECREASE)/INCREASE IN CASH (5,020,329) 3,579,206 __________ _________ Notes 1 IMPAIRMENT REVIEW During the year the board undertook an impairment review resulting in the exceptional goodwill write off. The results for the year have been shown in two column format to show the impact of goodwill charges and the results without goodwill charge. The comparatives have been also been shown in a two column format. 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 weighted average number of shares were 31 Mar 2002 31 Mar 2001 Number Number Basic weighted average number of shares 286,383,308 264,919,700 Dilutive potential ordinary shares: Employee share options 126,300 999,338 ___________ __________ 286,509,608 265,919,038 ___________ __________ 3 The financial information set out in this document does not constitute statutory group accounts. 4 The report and accounts for the year to 31 March 2002 will be posted to shareholders shortly and, after being laid before the Annual General Meeting, will be delivered to the Registrar of Companies. 5 The Annual General Meeting will be held at Butchers Hall, 87 Bartholomew Close, London, EC1A 9HP at 11.30am on 17 September 2002. Copies of this announcement will be available to the public, free of charge, from the offices 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: Hansard Communications 020 7735 9415 Adam Reynolds Takki Sulaiman Mobile:07778 419218 Seymour Pierce Limited 020 7648 8700 Sarah Wharry Artisan (UK) plc 01480 436666 Stephen Dean, Chairman Martyn Freeman, Chief Executive Chris Musselle, Finance Director This information is provided by RNS The company news service from the London Stock Exchange

Companies

The Artisanal Spirits Company (ART)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today