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Safeland PLC - Interim Results

RNS Number : 5875K
Safeland PLC
17 December 2018
 

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")

 

STRICTLY EMBARGOED UNTIL 7am: 17 December 2018

 

 

Safeland plc

("Safeland" or the "Company" or the "Group")

 

Interim Results

For the Six Months to 30 September 2018

 

Safeland (AIM: SAF), the property trading and investment company, announces its unaudited interim results for the six months ended 30 September 2018

 

Highlights

Turnover: £2.0m (2017: £2.8m)

Loss before tax: £0.5m (2017: loss £0.2m)

Net asset value per share: 140.2p (30 September 2017: 129.3p, 31 March 2018: 144.6p)

 

Managing Director's Statement

 

I am pleased to report the Group's interim results for the 6 months to 30 September 2018. These results reflect transactional volatility that shareholders will be aware of.

During the period, the Group sold five investment properties in north London. The Group took possession of four houses as part and final consideration for the sale of the Chandos Tennis Club. The consideration payable for the sale in 2014 comprised £4.0m in cash (which was received in 2014) and the balance was to be satisfied by way of transfer to Safeland of four detached houses (valued at the time by the Company's directors, in aggregate, at £9.2m) in the completed development.

All 3 houses in the Edeleny Close development and all 18 apartments in the Raglan Hall development have been let to third parties at an annual rental of £525k.

Given the results for the 6 months ended 30 September 2018, the Directors do not propose the payment of an interim dividend (6 months ended 30 September 2017: nil; year ended 31 March 2018: 1p). 

Outlook

As stated in previous announcements, the market continues to be constrained by the current economic and political outlook. However, we continue to pursue acquisition opportunities whilst continuing to add value to existing stock held through planning or development. To that end, since the period end, the Group has acquired a golf club in Woldingham, Surrey for £1.065m in cash. We intend to invest in developing the club's existing facilities and thereby enhance its appeal to both existing and new members. In November, we also acquired a shopping mall in Northampton for £0.6m in cash.

The Board is confident that it has the skills necessary to make selected acquisitions in the current market, but is being extremely selective until there is further clarity as to the general economic and political outlook.
 

For further information:

 

Safeland plc 

+44 (0) 20 8815 1600

Larry Lipman, Managing Director

 

 

 

Stockdale Securities
(Nominated Adviser and Broker)

+44 (0) 20 7601 6100

Tom Griffiths

 

 

 

For more information visit: www.safeland.co.uk

 

 

 

 

 

Condensed consolidated income statement

 

Unaudited

Unaudited

 

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

Revenue

 

 

 

Continuing

1,964

2,846

2,900

 

1,964

2,846

2,900

Cost of sales

(1,367)

(2,580)

(2,595)

Gross profit

597

266

305

 

 

 

 

Administrative expenses

(698)

(700)

(1,577)

Gain on revaluation of investment properties

-

-

3,833

Share of results of associate

12

12

25

Dividend from investment

6

6

11

(Loss)/profit on disposal of investment property

(145)

73

74

Profit on sale of fixed assets

-

12

-

Operating (loss)/profit

(228)

(331)

2,671

 

 

 

 

Finance income

1

293

148

Finance costs

(245)

(186)

(426)

(Loss)/profit before tax

(472)

(224)

2,393

Tax

-

-

(247)

(Loss)/profit for the financial period attributable to owners of the parent company

(472)

(224)

2,146

 

 

 

 

Basic (loss)/earnings per share (note 2)

(3.17p)

(1.49p)

14.25p

Diluted (loss)/earnings per share (note 2)

(3.17p)

(1.49p)

7.88p

 

 

There is no difference between the diluted loss per share and the basic loss per share presented as the effect of the share options in issue is anti-dilutive.

 

 

 

Condensed consolidated statement of comprehensive income

Unaudited

Unaudited

 

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

(Loss)/profit for the period

(472)

(224)

2,146

 

Other comprehensive (loss)/income

Fair value (losses)/gains on available for sale financial assets

(38)

30

(104)

Other comprehensive (loss)/income for the period, net of tax

(38)

30

(104)

Total comprehensive (loss)/income for the period attributable to owners of the parent company

(510)

(194)

2,042

 

 

 

Condensed consolidated statement of

financial position

Unaudited

Unaudited

Audited

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

Non-current assets

 

 

 

Property plant and equipment

1,753

1,830

1,789

Investment properties (note 5)

23,217

1,182

14,762

Investments in associate

139

133

127

Available-for-sale investments

660

832

698

 

25,769

3,977

17,376

Current assets

 

 

 

Trading properties (note 6)

4,404

13,290

5,018

Trade and other receivables

73

9,500

9,238

Cash and cash equivalents

481

2,157

1,066

 

4,958

24,947

15,322

 

 

 

 

Total assets

30,727

28,924

32,698

 

 

 

 

Current liabilities

 

 

 

Bank loans and overdrafts (note 7)

-

9,325

10,455

Trade and other payables

677

198

470

Corporation tax payable

166

-

140

 

843

9,523

11,065

Non-current liabilities

 

 

 

Bank loans (note 7)

8,910

-

-

Deferred income tax liabilities

74

32

74

 

8,984

32

74

 

 

 

 

Total liabilities

9,827

9,555

11,139

 

 

 

 

Net assets

20,900

19,369

21,559

 

 

 

 

Equity

 

 

 

Share capital (note 8)

745

749

745

Share-based payment reserve

354

354

354

Investment revaluation reserve

(224)

(52)

(186)

Capital redemption reserve

98

94

98

Retained earnings

19,927

18,224

20,548

Total equity attributable to owners of the parent company

20,900

19,369

21,559

 

 

 

Consolidated Statement of Changes in Equity

For the six months to 30 September 2018 (unaudited)

 

Share

Capital

 

 

£000

Capital redemption

reserve

 

£000

Share-based payment reserve

£000

Revaluation

Reserve

 

 

£000

Retained earnings

 

 

£000

Total

equity

 

 

£000

Balance at 31 March  2018

 

745

 

98

 

354

 

(186)

 

20,548

 

21,559

Comprehensive income

 

 

 

 

 

 

Profit/(loss) for the period

-

-

-

-

(472)

(472)

Revaluation of available-for-sale investments

-

-

-

(38)

-

(38)

Total comprehensive income

 

-

 

-

 

-

 

(38)

 

(472)

 

(510)

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

Dividend paid

-

-

-

-

(149)

(149)

Total transactions with owners

-

-

-

-

(149)

(149)

 

Balance at 30 September 2018

 

 

745

 

 

98

 

 

354

 

 

(224)

 

 

19,927

 

 

20,900

 

 

For the six months to 30 September 2017 (unaudited)

 

Share

Capital

 

 

£000

Capital redemption

reserve

 

£000

Share-based payment reserve

£000

Revaluation

Reserve

 

 

£000

Retained earnings

 

 

£000

Total

equity

 

 

£000

Balance at 31 March 2017

 

768

 

75

 

354

 

(82)

 

18,815

 

19,930

Comprehensive income

 

 

 

 

 

 

Profit for the period

-

-

-

 

(224)

(224)

Revaluation of available-for-sale investments

-

-

-

30

-

30

Total comprehensive income

 

-

 

-

 

-

 

30

 

(224)

 

(194)

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

Purchase of own shares

(19)

19

-

-

(216)

(216)

Dividend paid

-

-

-

-

(151)

(151)

Total transactions with owners

(19)

19

-

-

(367)

(367)

 

Balance at 30 September 2017

 

749

 

94

 

354

 

(52)

 

18,224

 

19,369

 

 

For the year ended 31 March 2018 (audited)

 

 

Share

Capital

 

£000

Capital redemption

reserve

£000

Share-based payment reserve

£000

Revaluation

Reserve

 

£000

Retained earnings

 

£000

Total

equity

 

£000

Balance at 31 March 2017

 

768

 

75

 

354

 

(82)

 

18,815

 

19.930

Comprehensive income

 

 

 

 

 

 

Profit for the year

-

-

-

-

2,146

2,146

Revaluation of available-for-sale investments

-

-

-

(104)

-

(104)

Total comprehensive income

 

-

 

-

 

-

 

(104)

 

2,146

 

2,042

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

Purchase of own shares

(23)

23

-

-

(262)

(262)

Dividend paid

-

-

-

-

(151)

(151)

Total transactions with owners

(23)

23

-

-

(413)

(413)

Balance at 31 March 2018

 

745

 

98

 

354

 

(186)

 

20,548

 

21,559

 

 

Condensed consolidated statement of cash flows

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

Cash flows from operating activities

 

 

 

Cash generated by/(utilised) from operations (note 4)

66

(4,409)

(6,274)

Interest paid

(245)

(165)

(395)

Corporation tax paid

-

-

(65)

Net cash (utilised)/generated from operating activities

(179)

(4,574)

(6,734)

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

1

3

5

Other dividends received

6

6

36

Purchase of property, plant and equipment

-

(52)

(44)

Additions to investment properties

(27)

-

-

Proceeds from sale of investment properties

1,309

116

72

Proceeds from sale of property, plant and equipment

-

79

79

Net cash inflow/(outflow) from investing activities

1,289

152

148

 

 

 

 

Cash flows from financing activities

 

 

 

New loans

-

1,665

2,785

Loan repayments

(1,546)

-

-

Purchase of own share capital

-

(215)

(262)

Dividends paid to equity shareholders

(149)

(151)

(151)

Loan repayments

 

-

-

Net cash inflow from/(used in) financing activities

(1,695)

1,299

2,372

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

(585)

(3,123)

(4,214)

Cash and cash equivalents at beginning of period

1,066

5,280

5,280

Cash and cash equivalents at end of period

481

2,157

1,066

 

 

 

1.      Basis of preparation and accounting policies

The condensed interim consolidated financial statements of the Company and its subsidiaries (the "Group") for the 6 months to 30 September 2018 (the "period") have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial information presented above does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006.

 

Copies of this announcement are available from the Company's registered office at 1a Kingsley Way, London N2 0FW and on its website, www.safeland.co.uk.

 

These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 March 2018. While the financial figures included within this interim report have been computed in accordance with IFRS applicable to interim periods, this report does not contain sufficient information to constitute an interim financial report as set out in International Accounting Standard 34 Interim Financial Reporting.

 

Revenue

Revenue is stated net of VAT and comprises rental income, proceeds from sales of trading properties, fees, commissions and other income.

 

Sales of trading properties are recognised on completion of a contract. This reflects the point of transfer of risk and rewards when a trading property is sold.

 

Rental income from investment and trading properties leased out under operating leases is recognised in the Income Statement on a straight-line basis over the term of the lease. Contingent rents which comprise turnover rents are recognised as income in the periods in which they are earned. Rent reviews are recognised when such reviews have been agreed with tenants.

 

Revenue in the previous period arising from deferred consideration in the form of four completed houses in a residential development being completed on the site of the Chandos Tennis Club in the forthcoming year is based on a valuation by the directors, discounted to a present-day value using the weighted average cost of capital.

 

Other fees in relation to property management are recognised on a straight-line basis over the term of management contracts.

 

Hotel revenue comprised revenues from overnight hotel accommodation, banqueting facility hire and sales of food and beverages. All revenues are recognised when the service is provided. The hotel closed and ceased to trade on 3 August 2017.

 

Freehold property

Freehold property is stated at cost less accumulated depreciation and is depreciated at 2% per annum on a straight-line basis, pro-rated in the year of acquisition.

 

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and are depreciated over their estimated useful lives on the following annual bases:

Motor vehicles                                                 25% (reducing balance)

Fixtures, fittings and equipment                   20% (reducing balance)

 

Investment properties

Investment properties are those properties that are held either to earn rental income or for capital appreciation or both. Investment properties are measured and stated at fair value in the statement of financial position. Valuation surpluses and deficits arising in the period are included in profit or loss.

 

The gain or loss arising on the disposal of a property is determined as the difference between the sales proceeds and the fair value of the asset at the beginning of the period and is recognised in the income statement.

 

Investment properties may be freehold properties or leasehold properties. For leasehold properties that are classified as investment properties, the associated leasehold obligations, if material, are accounted for as finance lease obligations.

 

Trading properties

Properties held for development and resale are classified as trading properties and are shown at the lower of cost and net realisable value. Cost comprises purchase price, acquisition costs and direct expenditure.

 

2.      Earnings per share

 

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

(Loss)/profit for the financial period attributable to owners of the parent company

(472)

(224)

2,146

 

 

 

 

 

No

No

No

 

'000

'000

'000

Weighted average number of ordinary shares for

 

 

 

the purposes of basic earnings per share

14,907

15,008

15,042

Effect of potential dilutive ordinary shares:

 

 

 

 

Share options

11,727

12,020

 

12,149

Weighted average number of ordinary shares for the purposes of diluted earnings per share

26,634

27,028

27,191

 

Diluted earnings per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. 

 

3.      Dividends

 

No interim dividend has been declared or paid in respect of the six months ended 30 September 2018. In the six months ended 30 September 2017, the Company did not declare or pay an interim dividend. A final dividend in the year to 31 March 2018 of 1p per ordinary share was declared and paid on 28 September 2018. A final dividend in the year to 31 March 2017 of 1p per ordinary share was declared and paid on 29 September 2017.

 

 

4.      Cash flows from operating activities

 

 

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

(Loss)/profit before tax

(472)

(224)

2,393

Depreciation of property, plant and equipment

36

40

79

Profit/(loss) on sale of property, plant and equipment

-

(12)

(18)

(Loss)/profit on sale of investment property

145

(73)

(74)

Loss/(gain) on revaluation of investment properties

-

-

(3,833)

Share of results of associate

(12)

-

(25)

Dividend from investment

 

 

(11)

Finance income

(6)

(3)

(148)

Unwinding of discount on deferred revenue

-

(290)

-

Finance costs

245

186

426

Changes in working capital

 

 

 

Decrease/(increase) in trading properties

581

(3,942)

(5,415)

(Increase)/decrease in trade and other receivables

(685)

(30)

114

Increase/(decrease) in trade and other payables

234

(61)

238

 

66

(4,409)

(6,274)

 

 

 

5.      Investment properties

 

 

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

Fair value

 

 

 

Start of the period

14,762

1,182

1,182

Transfer from current properties

9,910

-

9,747

Disposals

(1,455)

-

-

Increase in fair value during the period

-

-

3,833

End of period

23,217

1,182

14,762

 

The fair value of the investment properties at 30 September 2018 comprises freehold properties of £23,217,000 (30 September 2017: £457,000 and 31 March 2018: £13,832,000) and long leasehold properties of £nil (30 September 2017: £725,000 and 31 March 2018: £930,000).

 

The Group has pledged investment properties for resale with a total carrying value of £20,450,000 (30 September 2017: £1,175,000 and 31 March 2018: £14,762,000) to secure banking facilities granted to the Group.

 

6.      Trading properties                      

 

 

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

 

 

 

 

Properties for resale

4,404

13,290

5,018

 

The Group has pledged trading properties for resale with carrying value of £4,404,000 (30 September 2017: £13,290,000 and 31 March 2017: £5,012,000) to secure banking facilities granted to the Group.

 

 

7.      Bank loans and overdrafts                       

 

 

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

Due within one year

-

9,335

10,455

Unamortised borrowing costs

-

(10)

-

 

-

9,325

10,455

 

 

 

 

Due in the second to fifth years

9,049

-

-

Unamortised borrowing costs

(139)

-

-

 

8,910

-

-

 

All of the Group's bank loans and overdrafts disclosed above comprise borrowings in sterling. The facility is based on LIBOR plus a fixed margin.

 

The Group's £16,500,000 (2017: £12,500,000) revolving credit facility, which is secured on certain properties owned by the Group, was renewed in April 2018 under similar terms as the previous facility, and is due to expire in December 2020. The Group has operated within the covenants of the loan throughout the period.

 

8.      Share capital                  

 

 

Unaudited

Unaudited

 

 

Six months ended

Six months ended

Audited

Year ended

 

30 September

30 September

31 March

 

2018

2017

2018

 

£000

£000

£000

 

 

 

 

Authorised:

 

 

 

45,750,000 ordinary shares of 5p each

2,288

2,288

2,288

 

 

 

 

Allotted, called up and fully paid:

 

 

 

14,987,380 ordinary shares (30 September 2017: 14,987,380 31 March 2018: 14,987,380) of 5p each

745

749

745

 

The Company bought back and cancelled no shares in the period (2017: 380,000 shares; year to 31 March 2018: 460,000 shares), at a total cost of £nil (2017: £216,000; year to 31 March 2018: £262,000), reducing the nominal value of shares by £nil (2017: 19,000; year to 31 March 2018: £23,000), which is reflected in these accounts as a capital redemption reserve.

Following the period end, on 5 November 2018, the Company announced that on 2 November 2018 it had purchased 50,000 ordinary shares of 5p each at a price of 45p per share for cancellation; and on 9 November 2018 it announced that on the same day it had purchased 75,285 ordinary shares of 5p each at a price of 45p also for cancellation. These transactions have reduced the Company's issued share capital to 14,782,095 shares.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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