Interim Results

RNS Number : 5326H

Braemar Group PLC

06 November 2008

 



BRAEMAR GROUP PLC

UNAUDITED INTERIM RESULTS

CHAIRMAN'S STATEMENT

Braemar Group plc ('Braemar' or 'the Group') is pleased to announce its unaudited interim results for the six months ended 30 September 2008, during which time the Group has achieved turnover and gross profit growth by following its core strategy of managing direct investments in real estate assets owned by our client funds. 

Financial overview

The unaudited results for the six months to 30 September 2008 report revenue of £1,267,000 (30 September 2007: £231,000) and a loss before tax of £58,000 (30 September 2007 £287,000 loss). This reduction in the loss has been achieved through a combination of the increase in turnover, a positive contribution from both operating divisions and a pre-emptive reduction in certain costs earlier in 2008.

Divisional revenue for the period is made up of £633,000 from fund management and corporate finance ('Braemar Securities'), £595,000 from property management ('Braemar Estates') and £39,000 from property investment and trading.  The Directors are pleased that the benefits of the investment in people and systems are now beginning to show through in an increase in turnover and the improvement in operating profitability.

Cash balances and cash equivalents at the period end were £230,000, (2007: £1,013,000) added to which the Group purchased £252,000 in gilts just before the period end, a time when the stability of some banks was being called into question. The total equity of the Group stood at £2,668,000 at 30 September 2008 (30 September 2007: £3,348,000).  

Summary

Against the economic backdrop, the Group has continued to raise money for its funds, launch new funds and to prepare new funds for launch.  In the latter part of the last financial year, the Group made its first move to diversify its assets under management with the launch of two companies investing in farmland and is now preparing to launch funds for investment in a variety of other diverse real-estate assets, in the form of Open Ended Investment Companies or 'OEIC'. 

The Directors are pleased with Braemar's growing brand awareness amongst Financial Intermediaries, and, having built this platform for growth, anticipate that this will, in turn, generate credibility amongst Financial Institutions. Braemar has demonstrated that it is able to react quickly to changing economic and market conditions and to create innovative real estate products which have a place in today's asset allocation models. 

Financial results

The business is monitored internally by the performance of the two operating divisions and the highlights for the period under review are as follows:

Braemar Securities

This division successfully launched the first cell of the Group's OEIC, investing in tenanted UK agricultural land, which had its first dealing day in May 2008, having raised £2.3 million by then, substantially more than the £500,000 minimum amount required to obtain a listing for the fund on the Channel Islands Stock Exchange.  As an OEIC, this fund remains open for investment on a monthly basis and continued to receive additional applications during the period.  

The division acted a sponsor to the second offer for subscription of Braemar UK Agricultural Land plc. This company, the ownership of which is independent of Braemar Group plc, has just completed the acquisition of its first farm and has appointed advisers to prepare the company for admission to AIM, together with a placing and further offer for subscription. This flotation is timetabled to take place in the first quarter of 2009.  

The division now acts as manager to eight existing residential property partnerships.  During the period, one further partnership was launched, which will close for investment during the second half of the year. 

Braemar Estates 

Our apartment management business, with almost 2,500 units under management, continues to provide a stable cash flow for the business going forward and has demonstrated resilience in what has proven tough economics for the wider estate agency market. It is almost one year since we acquired part of this business, and the Directors are pleased with the subsequent integration, having demonstrated an increase in Braemar estates' turnover since the acquisition. 

Outlook

The performance of the Group for the period shows an encouraging improvement on the performance in the corresponding period in 2007 and on the full year results to 31 March 2008. As the scope and portfolio of funds continues to grow, the benefits of combining the Group's regulated financial services activities with the management of physical real estate assets owned by our client funds are becoming increasingly apparent. Braemar will use the OEIC to launch further funds during the remainder of the financial year, the first of which will be a UK student accommodation product.  

The Directors are pleased with the progress that has been made during the first half of the year and look forward to reporting further improvements in the Group's performance in the second half.

Martin Robinson

Chairman

6 November 2008

BRAEMAR GROUP PLC

 CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008

		Unaudited Six months ended 30 September 2008		Unaudited Six months ended 30 September 2007		Audited Year ended 31 March 2008
	Notes	£'000		£'000		£'000
Revenue		1,267		231		1,264
Cost of sales		(417)		(113)		(445)
Gross profit		850		118		819
Increase in fair value of investment properties		-		132		82
Administration Expenses		(894)		(538)		(1,340)
Operating loss		(44)		(288)		(439)
Investment income		17		21		42
Finance costs		(31)		(20)		(53)
Loss on ordinary activities before taxation		(58)		(287)		(450)
Taxation		-		-		(23)
Loss for the period from continuing operations		(58)		(287)		(473)
Loss for the period from discontinued operations		-		(32)		(471)
Loss attributable to equity holders of parent		(58)		(319)		(944)
Loss per share- basic and fully diluted	2	0.04p		0.23p		0.62p

BRAEMAR GROUP PLC

 CONSOLIDATED BALANCE SHEET

AT 30 SEPTEMBER 2008

		Unaudited 30 September 2008		Unaudited 30 September 2007		Audited 31 March 2008
	Notes	£'000		£'000		£'000
Non-current assets
Goodwill		2,694		2,423		2,694
Other intangible assets		90		100		101
Property, plant and equipment		172		144		183
Investment properties		225		275		225
Held-to-maturity investments		58		4		18
Other financial assets		317		-		37
Available-for-sale investments		14		29		32
		3,570		2,975		3,290
Current assets
Trade and other receivables		462		205		1,919
Cash and cash equivalents		230		1,013		289
		692		1,218		2,208
Total assets		4,262		4,193		5,498
Equity and Liabilities
Issued capital		1,638		1,638		1,638
Share premium	3	2,945		2,945		2,945
Retained earnings	3	(1,915)		(1,235)		(1,845)
Total equity		2,668		3,348		2,738
Non-current liabilities
Obligations under finance leases		18		18		29
Interest bearing loans and borrowings		225		-		225
Deferred Tax		23		-		23
		266		18		277
Current liabilities
Trade and other payables		793		304		1,949
Interest bearing loans and borrowings		512		512		512
Obligations under finance leases		23		11		22
		1,328		827		2,483
Total liabilities		1,594		845		2,760
Total equity and liabilities		4,262		4,193		5,498

BRAEMAR GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 3O SEPTEMBER 2008

		Unaudited Six months ended 30 September 2008		Unaudited Six months ended 30 September 2007		Audited Year ended 31 March 2008
	Notes	£'000		£'000		£'000
Operating activities
Loss before tax		(58)		(320)		(921)
Adjustments to reconcile loss before tax to net cash flows for:
Depreciation of property, plant and equipment		19		4		22
Amortisation of intangible assets		11		-		9
Impairment of intangible assets		-		-		160
Goodwill impairment charge		-		-		119
Share option charge		6		7		19
Share-based income		(29)		-		(37)
Increase in fair value of investment properties		-		(132)		(82)
Interest income		(17)		(21)		(42)
Interest expense		31		20		53
Decrease/(increase) in trade and other receivables		1,457		41		(1,622)
(Decrease)/increase in trade and other payables		(1,173)		(132)		1,444
Interest paid		(13)		(33)		(45)
Cash generated from operations		234		(566)		(923)
Cash flows from investing activities
Interest received		17		21		41
Purchase of property, plant and equipment		(7)		(35)		(186)
Purchase of held-to-maturity investments		(40)		-		(14)
Purchase of other financial assets		(252)		-		-
Purchase of investment property		-		(92)		(1)
Acquisition of subsidiary		-		(29)		(589)
Net cash used in investing activities		(282)		(135)		(749)
Cash flows from financing activities
Proceeds from issue of share capital		-		1,312		1,312
Transaction costs of issue of share capital		-		(16)		(16)
Proceeds from borrowings		-		26		283
Repayment of borrowings		(11)		(375)		(385)
Net cash from financing activities		(11)		947		1,194
Net (reduction)/increase in cash and cash equivalents		(59)		246		(478)
Cash and cash equivalents at 1 April		289		767		767
Cash and cash equivalents at 30 September		230		1,013		289

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

		Unaudited Six months ended 30 September 2008		Unaudited Six months ended 30 September 2007		Audited Year ended 31 March 2008
		£'000		£'000		£'000
Losses on available-for-sale investments taken to equity		(18)		(83)		(80)
Expense recognised directly in equity		(18)		(83)		(80)
Loss for the period		(58)		(319)		(944)
Total recognised income and expense for the period		(76)		(402)		(1,024)

1 - BASIS OF PREPARATION

The interim financial report has been prepared in accordance with the AIM rules and the basis of accounting policies set out in the accounts for the year to 31 March 2008 and on the basis of all International Financial Reporting Standards ('IFRS') that are expected to be applicable to the Group's statutory accounts for the year ended 31 March 2009. These standards are subject to ongoing review and possible amendment. Further standards and/or interpretations could be issued that could apply to that year. If any such amendment, new standards or new interpretations are issued these may require the financial information provided in the interim report to be changed.

The Directors have chosen not to comply with IAS 34. Accordingly, the interim financial statements do not comply with all the disclosures in IAS 34 on interim reporting and therefore are not in full compliance with IFRS.

The interim report is unaudited and does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. A copy of the statutory accounts for the year ended 31 March 2008, which were prepared under IFRS and on which the Company's auditors gave an unqualified report, have been filed with the Registrar of Companies.

2 - LOSS PER SHARE

	Unaudited Six months ended 30 September 2008		Unaudited Six months ended 30 September 2007		Audited Year ended 31 March 2008
	£'000		£'000		£'000
Loss for the period	58		319		944
Weighted average number of ordinary shares	163,786,903		136,924,486		150,392,492
Loss per ordinary share - basic	0.04p		0.23p		0.62p

There are 34,072,172 potentially issuable shares that have not been included in a diluted EPS calculation as they are anti-dilutive.

3 - RESERVES

Share Premium Account	Unaudited 2008		Unaudited 2007		Audited 31 March 2008
	£'000		£'000		£'000
At 1 April	2,945		1,957		1,957
Shares issued during the period	-		1,004		1,004
Share issue costs	-		(16)		(16)
At 30 September	2,945		2,945		2,945

Retained earnings	Unaudited 2008		Unaudited 2007		Audited 31 March 2008
	£'000		£'000		£'000
At 1 April	(1,845)		(840)		(840)
Loss for the period	(58)		(319)		(944)
Available-for-sale investments fair value movement	(18)		(83)		(80)
Credit arising on share options	6		7		19
At 30 September	(1,915)		(1,235)		(1,845)

4 - BOARD APPROVAL

The Interim Statement was approved by the Board on 4 November 2008. .

5 - COPIES OF INTERIM STATEMENT

Copies of this statement will be sent to shareholders shortly and are available to the public from the Registered Office at: Richmond House, Heath Rd, Hale, Cheshire, WA14 2XP.

For further information please contact:

Marc Duschenes, CEO, Braemar Group plc 
Julie Serrage, Investor Relations, Braemar Group plc 
Tel: [phone]

Alex Clarkson/Nick Cowles, Zeus Capital Limited  
Tel: [phone]

Stuart Forshaw, Corporate Broking, WH Ireland Limited
Tel: [phone]

 

END

 

 

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