Final Results
Unite Group PLC
25 March 2003
Date: 25 March 2003
On behalf of: The UNITE Group plc ('UNITE')
Embargoed until: 0700hrs
The UNITE Group plc - PRELIMINARY ANNOUNCEMENT
OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
HIGHLIGHTS
The UNITE Group plc, the UK's leading provider of student and NHS key worker
accommodation services, today releases the preliminary announcement of its
results for the year ended 31 December 2002. The key highlights are:
• Secured beds up 51% to 26,346 beds (2001: 17,460)
• Net assets up 52% to £308.1m (2001: £202.1m)
• Net asset value per share of 286p (2001: 297p)
• Rental income up 72% to £32.4m (2001: £18.8m)
• Annualised rent roll at £43.4m
• Occupancy rates averaging 95% during the year
• Bookings for next academic year 54%, up from 35% at March 2001
• Operating profits from completed properties up 65% to £19.1m (2001:
£11.6m)
• Pre-tax loss before exceptional items and goodwill of £(9.1)m (2001:
£(2.8)m)
• Final recommended dividend of 1.67p per share (2002 total: 2.5p)
(2001: 2.5p)
• First £275m securitisation in April 2002 releasing £39m for
reinvestment
• Successful equity raising in August 2002 raised £55m (net) to support
UNITE's growth objectives of securing 8,500 beds per annum
Commenting on the results, Geoffrey Maddrell, Chairman of The UNITE Group plc,
said:
'In a defining year and amidst challenging economic conditions, UNITE has proved
its resilience and business proposition. We have established clear strategic
objectives, consolidated management and started the process of continuous cost
control, thereby establishing the platform for future growth and attractive
financial returns. Our core divisions, development, manufacturing and
accommodation services, have made significant progress in line with plan. I
firmly believe that UNITE is well positioned to capitalise on the excellent
potential of its chosen market, to continue to deliver on our stated strategy
and to fulfil our shareholders' expectations.'
A presentation to analysts will be held today at 09.30 at 'The City Cellars',
The Brewery, Chiswell Street, London, EC1Y 4SD.
Enquiries:
The UNITE Group plc
Nicholas Porter, Chief Executive Officer Tel: 020 7902 5055
Simon Bernstein, Chief Financial Officer
Redleaf Communications Ltd Tel: 020 7955 1410
Emma Kane/Katharine Sharkey Mob: 07876 338339
CHAIRMAN'S STATEMENT
INTRODUCTION
UNITE is a highly focused business which has over the past few years secured the
leading position in the student and key worker accommodation market, principally
by offering a complete service from the development through to the servicing of
accommodation.
During the year, I am pleased to report the achievement of a number of key
objectives, notably a strong performance from our portfolio of completed
properties and the delivery of a planned development pipeline which increased
from 17,460 beds at the end of 2001 to 26,346 beds at the end of 2002.
2002 has been a year in which we built the firm financial and structural
foundations on which to deliver our true future potential. Importantly, the
Group established a brand new asset class in the bond markets when it completed
a securitisation of substantially all of its mature portfolio in April 2002. In
the process, £275m was raised from the issue of bonds, £39m of which was
released for reinvestment.
In August, in very difficult markets, and against a background of our clarity of
concept and strategic focus, we were able to raise £55m (net of expenses). This
was a lower level equity raising than previously planned, leading to a reduction
in our targeted growth in secured bed numbers to 8,500 per annum. This remains a
very healthy rate of growth and we very much appreciate the confidence shown by
our shareholders in supporting the new equity issue.
In addition to the delivery of performance against agreed plans and securing
finance to support long term growth, management's attention during the year has
been on putting in place the operational systems necessary for consistent
growth. These included setting up fully accountable operating divisions for the
development, accommodation services and manufacturing activities; creating an
effective management board responsible for developing and implementing detailed
plans; installing a package of Oracle e-business systems required for our
integrated business and initiating cost control programmes.
FINANCIAL RESULTS
In line with a further step change in the size of the business, the net asset
value of the Group increased from £202m to £308m. Of this increase of £106m,
£60m related to the portfolio itself and £74m to equity raised in the year,
offset by £9.1m of pre-exceptional losses and £18.9m of goodwill amortisation,
other exceptional items and dividends. With the larger number of shares now in
issue, net asset value per share fell marginally from 297p in 2001 to 286p. At
the end of 2002, the value of our completed portfolio stood at £542m, and the
total value of our properties including those in development stood at £710m.
Our portfolio of completed properties increased during the year from 10,337 beds
at the end of 2001 to 14,778 beds. Rental income on these properties (including
Peabody UNITE as if it had been consolidated for both years in full) once again
increased significantly, from £18.8m in 2001 to £32.4m. The annualised gross
rent roll at the end of 2002 stood at £43.4m. Operating profits from the
completed properties rose by 65% from £11.6m in 2001 to £19.1m in 2002. The
portfolio made a small profit after absorbing all attributable overheads and the
interest costs associated with the properties.
As the business is still strongly in a development phase, the Group recorded a
loss before exceptional items and goodwill, of £9.1m. That resulted from the
write-off of £6.2m of pre-contract development costs, in line with the
requirements of the new accounting policy UITF Abstract 34, which the Group
adopted in the year, and from absorbing central overheads, much of which is
associated with the growth of the business. This accounting standard has the
unusual result that costs associated with development are accounted for through
the profit and loss account whilst the associated NAV uplift is taken to the
balance sheet.
At the exceptional level, two significant costs were incurred, namely £1.3m in
relation to the University of Sheffield PPP contract negotiations, from which we
withdrew, and £9.7m of break costs in relation to historic debt following the
restructuring of debt funding. After these exceptional items and goodwill
amortisation, the Group recorded a loss after tax of £25.6m (2001: £2.0m) and a
loss per share (excluding goodwill amortisation, exceptional items and deferred
tax) of 10.67p (2001: 5.01p).
Gearing increased during the year, partly as a result of the securitisation, to
133% at 31 December 2002, representing a loan to value ratio of 58% (December
2001: 93% and 50% respectively). We would expect this trend to continue as the
ratio of completed assets relative to developments increases.
DIVIDEND
In line with our stated policy, the Board is pleased to recommend a final
dividend of 1.67p per share, making a total dividend of 2.5p per share for the
year (2001: 2.5p). The dividend will be paid on 14 May 2003 to shareholders on
the register on 11 April 2003.
BUSINESS PERFORMANCE
Development
Our acquisitions teams have continued to provide a strong pipeline of well
located schemes for future development in our target towns and cities across the
UK. UNITE's growth strategy is to target prime cities and regional markets,
thereby gaining operating cost efficiencies and synergies. The Group has
secured over 1,000 beds in each of ten target cities (Aberdeen, Bristol,
Glasgow, Leeds, Liverpool, London, Manchester, Newcastle, Portsmouth and
Sheffield), four of which were added in 2002.
Manufacturing
Off-site manufacturing is another important element in our strategy for
addressing cost and quality on a lifetime basis. We have the advantage of
reasonably standard products, to which we are able to apply modern manufacturing
processes. During the year we replaced the less automated manufacturing
facility in Bristol and commissioned a new modular manufacturing facility in
Gloucestershire, capable of producing high volumes of fully finished bedroom
modules. As the facility ramps up production in 2003, the Group anticipates
producing some 1,500 equivalent modules and depending on exact volume and mix,
expects to incur a loss of £1.5m in this start up year, the majority of which
will be incurred in the first half of the year. The facility is expected to
breakeven by the end of 2004.
Accommodation Services
The key for longer-term success in accommodation services lies in effective
marketing and the careful management of the properties themselves. We have
extended our marketing activities with promotions, marketing materials, show
flats and our student web site, all with a view to maximising occupancy,
particularly in newly opened accommodation. It is a credit to our regional
accommodation teams that we maintained an average of 95% occupancy on all
available rooms throughout the year.
THE BOARD AND STAFF
We were delighted to announce recently the appointment of Nigel Hall as a
non-executive Director. Nigel was Group Finance Director of Arcadia Group plc
(formerly The Burton Group plc) until February 2003 and joined us on 6 March
2003. I am certain he will make a significant contribution to the Group.
David Naish will retire from the Board with effect from 25 March 2003. David's
involvement with the Group dates back to 1996 and includes him having served for
more than four years as a non-executive director. In particular, David was
Chairman of the Group when it was first listed on the Alternative Investment
Market in 1999. I would like to thank him for all his efforts over the years
and send him our warm good wishes for the future.
We also announce that David Ransome, Chief Operating Officer, will be stepping
down from the Group Board and leaving the Group with effect from June 2003.
David has overseen the development of the people and processes required to grow
the business. Now that the senior management team and Operations Board are in
place and working effectively, David's role has come to a natural end. His
duties will be absorbed into the role of Chief Executive Officer, with Nicholas
Porter taking over full line management responsibilities for the Operations
Board from April 2003. David has made an invaluable contribution to the growth
and development of UNITE and will be missed by colleagues across the business.
Special attention was paid in the year to reshaping and strengthening our senior
management team, which is performing well. There are significant demands on all
employees in growing a business in a new industry sector. We particularly
appreciate the commitment, energy, flexibility and willingness to take on the
challenges evidenced throughout the business, all of which have made it possible
for us to put in place a dynamic strategy. We are very excited at the long-term
potential which UNITE can offer to all of its stakeholders.
PROSPECTS
In a defining year and amidst challenging economic conditions, UNITE has proved
its resilience and business proposition. We have established clear strategic
objectives, consolidated management and started the process of continuous cost
control, thereby establishing the platform for future growth and attractive
financial returns. Our core divisions, development, manufacturing and
accommodation services, have made significant progress in line with plan. I
firmly believe that UNITE is well positioned to capitalise on the excellent
potential of its chosen market, to continue to deliver on our stated strategy
and to fulfil our shareholders' expectations.
Geoffrey Maddrell
Chairman
Consolidated balance sheet
at 31 December 2002
Note 2002 Restated 2001
£000 £000 £000 £000
Fixed assets
Intangible assets 10,710 12,886
Tangible assets
Investment and development properties 5 709,595 373,532
Other tangible fixed assets 21,713 7,921
731,308 381,453
Joint venture undertakings 6
Share of gross assets - 51,159
Share of gross liabilities - (37,950)
- 13,209
742,018 407,548
Current assets
Stocks 1,551 2,464
Debtors 18,509 33,371
Cash at bank and in hand 10,258 5,984
30,318 41,819
Creditors: amounts falling due within one
year
Short term build facilities and other
borrowings
(including convertible debt) 7 (74,359) (42,354)
Other creditors (41,426) (50,399)
Net current liabilities (85,467) (50,934)
Total assets less current liabilities 656,551 356,614
Creditors: amounts falling due after more
than
one year
Long term borrowings 7 (345,886) (151,931)
Other creditors (2,547) (2,625)
Net assets 308,118 202,058
Capital and reserves
Called up share capital 8 26,901 16,989
Share premium account 136,233 71,685
Merger reserve 40,177 40,177
Revaluation reserve 135,654 81,516
Profit and loss account (30,847) (8,309)
Equity shareholders' funds 308,118 202,058
Net asset value per share 286p 297p
Consolidated profit and loss account
for the year ended 31 December 2002
Restated
2002 2001
Note £'000 £'000
Group turnover and share of joint venture 33,872 26,312
Less: share of turnover of joint venture (999) (1,813)
Group turnover - existing operations 29,103 24,499
- acquired operations 3,770 -
4 32,873 24,499
Cost of sales (8,388) (8,545)
Gross profit - existing operations 21,604 15,954
- acquired operations 2,881 -
24,485 15,954
Administrative expenses - ordinary (16,583) (12,471)
- exceptional 9 (1,303) -
- goodwill (5,472) (75)
amortisation
Group operating profit 1,127 3,408
Share of results of joint venture 6 299 1,245
Profit on disposal of investment properties 461 262
Profit on ordinary activities before interest and taxation 1,887 4,915
Net interest payable and similar charges - group - ordinary 10 (17,567) (6,641)
- exceptional 9 (9,744) -
- joint venture 6 (211) (1,167)
Loss on ordinary activities before taxation, exceptional items
and
goodwill amortisation 13 (9,116) (2,818)
Loss on ordinary activities before taxation (25,635) (2,893)
Taxation 11 - 853
Loss on ordinary activities after taxation (25,635) (2,040)
Dividends paid and proposed (2,685) (1,825)
Retained loss for the financial period (28,320) (3,865)
Earnings per share 13
Basic (30.02)p (3.63)p
Excluding goodwill amortisation, exceptional items and deferred (10.67)p (5.01)p
tax
Diluted (30.02)p (3.63)p
Consolidated cash flow statement
for the year ended 31 December 2002
Restated
Note 2002 2001
£000 £000
Cash flow from operating activities 15 5,987 (8,781)
Returns on investments and servicing of finance 16 (28,323) (8,325)
Acquisitions and disposals 16 (1,210) (3,620)
Capital expenditure and financial investment 16 (193,187) (83,075)
Equity dividends paid (2,131) (1,190)
Cash outflow before financing (218,864) (104,991)
Financing 16 223,138 106,699
Increase in cash in the year 4,274 1,708
Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2002
Restated
Note 2002 2001
£000 £000
Increase in cash in the year 4,274 1,708
Cash flow from increase in debt and lease financing (168,114) (68,511)
Change in net debt resulting from cash flows (163,840) (66,803)
Debt acquired in subsidiary undertaking (54,807) (31,864)
Loan notes issued as consideration for subsidiary undertaking - (9,300)
New finance lease and hire purchase contracts - (528)
Amortisation of debt issue costs (3,039) (143)
Movement in net debt in the year (221,686) (108,638)
Net debt at beginning of year 17 (188,301) (79,663)
Net debt at end of year 17 (409,987) (188,301)
Consolidated statement of total recognised gains and losses
for the year ended 31 December 2002
Restated
Note 2002 2001
£000 £000
(Loss) / profit for the financial year
Group (25,723) (2,118)
Share of joint venture 6 88 78
(25,635) (2,040)
Unrealised surplus on revaluation of properties 59,732 34,360
Unrealised surplus on revaluation of joint venture 221 249
Unrealised (loss)/profit on trading with joint venture (33) 3,261
Total recognised gains and losses for the financial year 34,285 35,830
Prior year adjustment (as explained in note 3) (5,812) -
Total gains and losses recognised since the last annual 28,473 35,830
report
Net asset value added per share 14 40.1p 63.7p
Note of consolidated historical cost profits and losses
for the year ended 31 December 2002
Restated
2002 2001
£000 £000
Reported loss on ordinary activities before taxation (25,635) (2,893)
Realisation of property revaluation gains of previous 514 256
years
Historical cost loss on ordinary activities before (25,121) (2,637)
taxation
Historical cost loss for the year retained after taxation
and
dividends (27,806) (3,609)
Reconciliation of movements in shareholders' funds
for the year ended 31 December 2002
Restated
2002 2001
£000 £000
Loss attributable to ordinary shareholders (25,635) (2,040)
Dividends paid and proposed (2,685) (1,825)
(28,320) (3,865)
Net surplus on revaluations 59,920 37,870
New share capital subscribed (net of issue costs) 74,460 83,024
Net addition to shareholders' funds 106,060 117,029
Opening equity shareholders' funds (originally
£207,105,000
before deducting the prior year adjustment of £5,047,000) 202,058 85,029
Closing equity shareholders' funds 308,118 202,058
Notes
1. Basis of preparation
The group accounts include the accounts of the company and its subsidiary
undertakings, all of which are made up to 31 December 2002.
The financial information set out in this preliminary announcement is prepared
on the basis of the accounting policies set out in the most recent set of annual
Financial Statements, except that during the period, the Group has adopted the
requirements of Financial Reporting Standard 19 and UITF Abstract 34, as
detailed in note 3.
The financial information set out in this document does not constitute the
company's statutory accounts for the years ended 31 December 2002 or 2001. The
financial information for 2001 is derived from the statutory accounts for 2001,
which have been delivered to the Registrar of Companies. The auditors have
reported on the 2001 accounts; their report was unqualified and did not contain
a statement under section 237 (2) or (3) of the Companies Act 1985.
The statutory accounts for 2002 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and will
be delivered to the Registrar of Companies following the company's annual
general meeting.
This preliminary announcement was approved by the board of directors on 25 March
2003 and satisfies the provisions of S240 of the Companies Act 1985 regarding
the publication of non-statutory accounts.
2. Goodwill
On 13 March 2002 the Group took full control of its London joint venture by
acquiring Peabody Trust's 50 per cent interest in Peabody UNITE plc for a
consideration (including the cost of the acquisition) of £16.2m, satisfied by
the issue of shares with a value of £14.6m and £1.6m payable in cash. In
addition, a further £4.8m was paid to settle the joint venture's indebtedness to
Peabody Trust by the issue of further shares. The fair value of the net assets
acquired was £12.9m, giving rise to £3.3m of goodwill.
3. Prior year adjustment
During the period the Group has adopted UITF Abstract 34: Pre-contract costs.
As a result, in respect of development activity, costs incurred prior to
contracts being exchanged will be expensed through the profit and loss account
as incurred. Costs incurred following exchange of contracts will continue to be
attributed directly to the cost of the asset. Bidding costs relating to
PPP-type contracts which are incurred prior to Preferred Bidder status being
achieved will be expensed through the profit and loss account as incurred.
The results of the prior periods have been restated on the basis of this new
accounting policy, which causes more costs to be expensed in the profit and loss
account but greater revaluation gains to occur, as the cost of assets is
reduced.
There is a timing difference between the expensing of costs and recognition of
revaluation gains which amounts to £5.0m at 31 December 2001 and has been
treated as a prior year adjustment.
The Group has also adopted the requirements of Financial Reporting Standard 19:
Deferred Tax, which requires provision for deferred tax on all timing
differences. Timing differences existed at 31 December 2000 giving rise to a
deferred tax liability at this date of £853,000. These timing differences had
reversed by 31 December 2001 such that no provision for deferred tax is required
at that date or at 31 December 2002. The comparative figures have been restated
accordingly giving rise to both the appropriate balance sheet adjustments and a
tax credit in the profit and loss account in 2001.
4. Segmental analysis of operations
Restated
2002 2001
£'000 £'000
Turnover
Investment activities
Existing operations 27,586 15,219
Acquired operations 3,770 -
31,356 15,219
Development and corporate activities
Existing operations 1,517 9,280
Total
Existing operations 29,103 24,499
Acquired operations 3,770 -
32,873 24,499
Profit before interest and tax
Investment activities 18,736 10,117
Development and corporate activities (16,849) (5,202)
1,887 4,915
Net assets
Investment activities 199,990 145,410
Development and corporate activities 108,128 56,648
308,118 202,058
5. Investment and development properties
Properties held
Investment Developments in for future
properties progress development Total
£000 £000 £000 £000
Cost or valuation and net book
value
At beginning of year 288,620 69,539 18,407 376,566
Prior year adjustment (see note 3) - (1,209) (1,825) (3,034)
At beginning of year - as restated 288,620 68,330 16,582 373,532
Additions 130,187 116,296 31,070 277,553
Disposals (2,220) - - (2,220)
Transfers 118,799 (87,124) (31,675) -
Transfer from other tangible fixed 998 - - 998
assets
Revaluations 5,440 45,813 8,479 59,732
At 31 December 2002 541,824 143,315 24,456 709,595
At 31 December 2001 - restated 288,620 68,330 16,582 373,532
Included within investment and development properties are the following values
in respect of leasehold interests:
Properties held
Completed Developments in for future Total Total
developments progress development 2002 2001
£000 £000 £000 £000 £000
Cost or valuation and net
book value
Long leasehold 69,850 19,720 - 89,570 52,478
Short leasehold 11,900 - - 11,900 9,388
81,750 19,720 - 101,470 61,866
The valuation of investment and development properties comprise:
2002 2001
£000 £000
Historical cost 573,941 309,066
Revaluation 135,654 64,466
709,595 373,532
6. Joint venture undertaking
Interest in
joint venture
£000
Cost or valuation and net book value
At beginning of year - as previously reported 13,302
Prior year adjustment (see note 3) (93)
At beginning of year - as restated 13,209
Share of operating profit until acquisition 299
Share of interest payable until acquisition (211)
Share of retained profit until acquisition 88
Share of revaluation prior to acquisition 221
Total 13,518
Acquisition during the year (13,518)
At end of year -
On 13 March 2002 the Group took full control of its London joint venture by
acquiring Peabody Trust's 50 per cent interest in Peabody UNITE plc, the details
of which were as follows:
Fair value
Book value adjustments Fair value
£000 £000 £000
Tangible fixed assets 103,904 312 a 104,216
Stocks and work in progress 767 130a 897
Debtors 2,125 2,125
Cash 331 331
Creditors (25,726) (1,346)b (27,072)
Bank loans (54,807) (54,807)
26,594 (904) 25,690
Purchase of 50% share of net assets 12,845
Settlement of joint venture indebtedness to Peabody Trust 4,836
Goodwill 3,296
20,977
Satisfied by:
Cash (including costs of acquisition, £746,899) 1,541
Shares allotted 19,436
20,977
The fair value adjustments arose as follows:
a) Revaluation of the portfolio of properties to their open market value,
and developments in progress to valuation at acquisition, by Timothy Butler
FRICS, the Head of Group Valuation.
b) A valuation of the cost of breaking Peabody UNITE plc's swaps and fixed
rate loans as at the completion date.
7. Analysis of debt
2002 2001
£000 £000
Bank loans, other loans and
overdrafts fall
due:
In one year or less, or on demand 73,607 41,909
Between one and two years 18,821 1,212
Between two and five years 65,646 87,158
In five years or more 259,858 63,215
417,932 193,494
Obligations under finance lease and hire purchase contracts fall due:
2002 2001
£000 £000
In one year or less 752 445
In more than one year 1,561 346
2,313 791
The Group has various borrowing facilities available to it. The undrawn
committed facilities available at 31 December 2002 in respect of which all
security conditions precedent had been met at that date were as follows:
2002 2001
£000 £000
Expiring in one year or less
Build facilities 104,373 7,428
Other facilities 5,000 5,300
109,373 12,728
Expiring between two and five years 2,018 -
111,391 12,728
8. Called up share capital
2002 2001
£000 £000
Authorised
155,000,000 (2001: 120,000,000) ordinary shares of 25p each 38,750 30,000
Number of
shares £000
Allotted, called up and fully paid
At beginning of year 67,957,895 16,989
Acquisition of Peabody UNITE plc 6,783,945 1,696
Shares issued to raise funds 32,857,143 8,214
Share options exercised and scrip dividends 5,789 2
At end of year 107,604,772 26,901
On 16 August 2002, the Company increased its authorised share capital by
£8,750,000 to £38,750,000 divided into 155,000,000 ordinary shares of 25p each
by the creation of an additional 35,000,000 ordinary shares of 25p each.
9. Exceptional items
The exceptional cost of £1,303,000 comprises bid costs relating to the Sheffield
PPP project incurred since the Group's appointment as Preferred Bidder. As this
project is no longer going to proceed, these costs have been expensed to the
profit and loss account in accordance with the Group's accounting policy, but
were unusually large due to the size and complexity of the proposed project.
The exceptional costs of £9,744,000 comprise costs associated with the early
termination of loans and related hedging instruments as a result of the
securitised bond issue.
10. Interest payable and similar charges
2002 2001
£000 £000
Amounts payable on bank loans and overdrafts
On loans not wholly repayable within five years 231 4,189
On loans wholly repayable within five years 10,866 4,284
On bank overdrafts 82 59
Amounts payable on other loans
On asset backed bonds 13,527 -
On convertible unsecured loan stock 466 609
On unsecured loan notes 285 231
Finance charges payable in respect of finance lease and hire purchase 102 7
contracts
25,559 9,379
Transfer to cost of investment and development properties (7,411) (2,178)
18,148 7,201
Less: interest receivable (581) (560)
17,567 6,641
Share of interest payable by joint venture 211 1,167
17,778 7,808
11. Taxation
There is no corporation tax charge in the period due to the availability of
capital allowances and tax losses to offset against taxable profits accrued.
The tax credit in the prior period represents the release of the deferred tax
provision created at 31 December 2000 by restatement for FRS19.
12. Dividends
2002 2001
£000 £000
Equity
Interim dividend paid of 0.83p (2001: 0.83p) per 25p ordinary share 897 585
Final dividend proposed of 1.67p (2001: 1.67p) per 25p ordinary share 1,788 1,240
2,685 1,825
13. Earnings per share
Basic earnings per share has been calculated using a weighted average number of
shares of 85,398,488 (2001: 56,243,133) as follows:
Earnings EPS
After goodwill Before goodwill After goodwill Before goodwill
amortisation amortisation amortisation amortisation
and and and and
deferred tax deferred tax deferred tax deferred tax
£'000 £'000 pence pence
Year ended 31 December 2002
Basic earnings (25,635) (20,163) (30.02) (23.61)
Bond issue - loan cancellation costs 9,744 9,744 11.41 11.41
PPP bid costs written off 1,303 1,303 1.53 1.53
Prior to exceptional costs (14,588) (9,116) (17.08) (10.67)
Year end 31 December 2001
Basic earnings (2,040) (2,818) (3.63) (5.01)
The share options and convertible loan stock in issue during 2001 and 2002 do
not give rise to any dilutive potential ordinary shares and therefore the basic
and diluted loss per share are the same.
14. Net asset value added per share
Net asset value added per share of 40.1p (2001: 63.7p) has been calculated on
total gains and losses recognised in the year of £34,285,000 (2001: £35,830,000)
divided by the average number of ordinary shares in issue during the year of
85,398,488 (2001: 56,243,133).
15. Reconciliation of operating profit to operating cash flows
2002 2001
£000 £000
Operating profit 1,127 3,408
Depreciation and amortisation charges 7,167 1,167
Decrease in stocks 1,532 2,124
Increase in debtors (806) (19,417)
(Decrease) / increase in creditors and provisions (3,033) 3,912
Loss on sale of fixed assets - 25
Net cash inflow / (outflow) from operating activities 5,987 (8,781)
16. Analysis of cash flows
2002 2001
£000 £000
Returns on investment and servicing of finance
Interest received 581 560
Interest paid (21,162) (8,885)
Exceptional interest paid (7,742) -
Net cash flow from returns on investment and servicing of finance (28,323) (8,325)
Acquisitions and disposals
Purchase of subsidiary undertaking (1,541) (4,017)
Cash balances acquired with subsidiary 331 397
Net cash flow from acquisitions and disposals (1,210) (3,620)
Capital expenditure and financial investments
Purchase of tangible fixed assets (196,147) (86,088)
Disposal of tangible fixed assets 2,960 3,063
Purchase of own shares - (50)
Net cash flow from capital expenditure and financial investments (193,187) (83,075)
Financing
Issue of share capital 55,024 38,188
Movement on bank loans 171,088 68,856
Movement on loan notes (4,496) -
Finance lease and hire purchase contracts 1,522 (345)
Net cash flow from financing 223,138 106,699
17. Analysis of net debt
At 1 January Acquired with At 31
2002 Cash flow subsidiary Other changes December 2002
£000 £000 £000 £000 £000
Cash at bank and in hand 5,984 4,274 - - 10,258
Financing
Debt due within one year (41,909) (31,284) - (414) (73,607)
Debt due after one year (151,585) (135,308) (54,807) (2,625) (344,325)
Finance lease and hire purchase
contracts (791) (1,522) - - (2,313)
(168,114) (54,807)
Net debt at end of year (188,301) (163,840) (54,807) (3,039) (409,987)
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