6th Apr 2005 07:30
Boot(Henry) PLC06 April 2005 HENRY BOOT PLC PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31st DECEMBER 2004 Henry Boot PLC, the property development, land management, construction andplant hire group, announces its results for the year ended 31st December 2004. HIGHLIGHTS PROFIT BEFORE TAXATION UP 15% * EARNINGS PER SHARE UP 11% * NET ASSETS PER SHARE AT 502p DIVIDEND UP 10.8% * Excluding profits on sale of discontinued businesses John Reis, Chairman, comments: "2004 proved to be another excellent year for our company ..." "The contribution from our Property Development operation was again significant..." "Our Land Management Company had an encouraging year ..." "A positive growth in profit margin was achieved by our Construction business..." "The Plant Hire activity recorded a strong performance in the second half of theyear ..." Enquiries: Jamie Boot, Group Managing Director - Tel: 0114 255 5444 CHAIRMAN'S STATEMENT 2004 proved to be another excellent year for our company with a satisfactoryunderlying growth in core profit. This was achieved despite the expected fallin turnover which resulted from the strategic restructuring undertaken in theprevious year to minimise exposure to high risk cyclical markets. Operating profit for our continuing operations increased from £11.5m (2003) to£15.7m despite turnover falling from £90m to £84.2m. After discounting profitmade on the sale of discontinued operations in 2003, profit before taxation rose15% from £13.7m to £15.9m. On a like-for-like basis, this constitutes anotherrecord year's trading. Basic earning per share, excluding disposal profits, showed an 11% increase from38.2p per share to 42.4p per share. In the second half of the year, we increased our interest in Road Link (A69)Holdings Limited to 61.2% and we now fully incorporate the company's resultsinto our own with a reported minority holding. The increase in net interestpaid in the year is almost entirely attributable to the interest arising on thenon-recourse borrowings of Road Link (A69) Holdings Limited and our propertydevelopment scheme at Nova Scotia Retail Park, Blackburn. The significant cash balances held by the Group provide every opportunity topursue our growth objectives for the Property Development and Land Tradingactivities. Trading Summary Whilst the excellent results achieved may be viewed against the background of astrong property market and sustained demand for land by the housing industry, wecontinue to be affected by the vagaries of the planning system which continue tofrustrate by creating delays and reducing land availability. In addition, we still await the Government's reaction to the Kate Barker Reviewof Housing Supply proposals, and our industry braces itself for the possibleintroduction of a form of development land tax. The contribution from our Property Development operation was again significant,though lower than in previous years due to fewer schemes being sold on duringthe period. Principal sales in the year were retail developments at Nova ScotiaRetail Park, Blackburn (including a B&Q Warehouse), and at Wessex Fields RetailPark, Frome, Somerset. We continued to appraise and secure a steady supply of new and varyingopportunities, which has led to an increase in the number of schemes currentlyin development. With investor interest remaining strong, particularly whilstpension funds seek to diversify their asset allocations, our immediate prospectsremain firm and we look forward to further achievements in the year ahead. Our Land Management company had an encouraging year despite delays experiencedin the planning processes. A number of land sales were effected, the mostsignificant of which was at Prestonpans in Scotland. Notwithstanding thesedisposals, we still retain an interest in 6,000 acres of land which are eitherowned, optioned or controlled through agency agreements. Further land holdings awarded planning consent during the course of the year,together with the sound overall state of the activity, enable us to continue tolook to the future with confidence. A positive growth in profit margin was achieved by our Construction business asit benefited from being more selective in its approach to work undertaken. Neworders centred on framework contracts and partnership work, and our reputationwas further enhanced in successfully completing HM Prison, local authority,housing refurbishment and estate regeneration projects. Turnover fell a little below expectation as some delays accompanied the award ofnew work, but this in turn put us in a better position as we entered the currentyear with a healthy order book. The Plant Hire activity recorded a strong performance in the second half of theyear, reversing the fortunes of a difficult first half, to make a usefulcontribution to the overall Group results. Growth was particularly achievedthrough expanding tool hire sales, toilet hire operations, portable and modularaccommodation sales, and increased hire demand for 'big air' compressors. Allthese areas combined to help the activity register an acceptable level ofprofit, and to position it favourably for the year ahead. Financial Position, Dividends and Outlook With Group net assets exceeding £132m at the year end, the value of net assetsper share at 502p, and net cash in excess of £10m, your Board moved into 2005with confidence. Your company is in a strong position to meet the challenges of the current yearand beyond with a portfolio of exciting property development schemes underway,significant land interests with planning or near planning status, and a healthyconstruction forward order book. Our results for 2005 will adopt the International Financial Reporting Standards(IFRS) as required by the Financial Services Authority for all companies listedon the London Stock Exchange. The major International Accounting Standards (IAS) that are likely to differfrom existing UK Generally Accepted Accounting Principles (UK GAAP) and whichwill affect us, are IAS 7 Cash flow statements; IAS 10 Events after the balancesheet date (the impact of year end dividends); IAS 12 Income taxes; IAS 14Segment reporting; IAS 16 Property, plant and equipment (in so far as theGroup-occupied properties will need to incorporate regular revaluation); IAS 19Employee benefits; possibly IAS 32 Financial Instruments: Disclosure andpresentation; IAS 39 Financial instruments: Recognition and measurement; and IAS40 Investment property. It is not possible at this juncture to quantify the actual effects of all theproposed changes. However, IAS 19 Employee benefits which is similar to theexisting UK GAAP FRS 17 is likely to have the greatest effect on the Group. In readiness for implementation of IFRS, we brought forward by one year therequirements to have our investment properties re-valued by external valuers.Based on open market values, and in accordance with the prescribed guidelines,this exercise increased the value of our investment properties by more than £9m,or approximately 34p per share. As we continue to report under UK GAAP, thevaluation of properties occupied by Group undertakings remains unaffected for2004. The present year has commenced in line with our expectations which, coupled withthe above, has encouraged your directors to propose a final dividend of 12.0p(2003: 10.8p). This gives an overall dividend for the year of 16.4p (2003:14.8p), a 10.8% increase. John S ReisChairman6th April 2005 Summarised Group Profit & Loss Account for the year ended 31st December 2004 2004 2004 2003 2003 £'000 £'000 £'000 £'000 TurnoverGroup and share of associates 86,125 108,821Less: share of associates' turnover 1,878 2,900 -------- --------Continuing operations 81,038 90,027Acquisitions 3,209 -Discontinued operations - 15,894 -------- -------- Group turnover 84,247 105,921Cost of sales 60,185 83,765 -------- --------Gross profit 24,062 22,156Administrative expenses 8,504 9,879 -------- -------- 15,558 12,277 Other operating income 121 37 -------- -------- Operating profit:Continuing operations 13,754 11,501Acquisitions 1,925 -Discontinued operations - 813 -------- -------- 15,679 12,314Share of associates' operating profits 1,146 1,748 -------- -------- Group operating profit 16,825 14,062Profit on sales of discontinued operations - 16,209Interest (780) (19)Interest - share of associates (188) (299) -------- -------- Profit on ordinary activities before taxation 15,857 29,953Tax on profit on ordinary activities 4,532 4,029 -------- --------Profit on ordinary activities after taxation 11,325 25,924Equity minority interest (485) - -------- --------Profit for the financial year 10,840 25,924 -------- -------- Dealt with as follows:Dividends paid and proposed Cumulative preference shares (non-equity) 5.25% (2003: 5.25%) 21 21 Ordinary shares 16.4p (2003: 14.8p) 4,192 3,781Profit retained 6,627 22,122 -------- -------- 10,840 25,924 -------- --------Basic earnings per ordinary share 42.4p 102.1p -------- --------Diluted earnings per ordinary share 41.5p 99.8p -------- -------- Summarised Group Balance Sheet at 31st December 2004 2004 2003 £'000 £'000 Fixed assets 57,664 32,085 -------- --------Current assetsStocks 98,681 78,937Debtors 10,576 49,471Cash at bank and in hand 32,878 6,457Creditors: amounts falling due within one year (55,168) (40,571) -------- --------Net current assets 86,967 94,294 -------- --------Total assets less current liabilities 144,631 126,379Creditors: amounts falling due after more that one year (11,044) (10,444)Provisions for liabilities and charges (1,186) (579) -------- --------Net assets employed 132,401 115,356 -------- --------Capital and reservesCalled up share capital 3,005 3,005Capital redemption reserve fund 271 271Share premium account 2,563 2,563Property revaluation reserve 22,831 13,911Profit and loss account 103,107 95,971Other reserves 253 624Cost of shares held by the ESOP trust (849) (989) -------- --------Shareholders' funds 131,181 115,356Non-equity shareholders' funds 400 400Equity shareholders' funds 130,781 114,956Equity minority interests 1,220 - -------- -------- 132,401 115,356 -------- -------- Group Statement of Total Recognised Gains and 2004 2003Losses for the year ended 31st December 2004 £'000 £'000 Profit for the financial period 10,840 25,924Unrealised surplus on property revaluation 9,448 459Elimination of revaluation surplus on transfer ofproperties to stocks (520) (483) -------- --------Total recognised gains and losses for the year 19,768 25,900 -------- -------- Summarised Group Cash Flow Statement for the year 2004 2003 ended 31st December 2004 £'000 £'000 Net cash inflow (outflow) from operating activities 5,054 (13,106)Dividends received from associates 270 927Returns on investment and servicing of finance (916) (16)Taxation (3,959) (4,611)Capital expenditure and financial investment (1,912) (1,592)Acquisitions and disposals 20,545 14,920Equity dividends paid (3,884) (3,504) -------- --------Cash inflow (outflow) before use of liquid resources and financing 15,198 (6,982)Financing (864) (764) -------- --------Increase (decrease) in cash 14,334 (7,746) -------- -------- Notes to the Group Cash Flow Statement 2004 2003 £'000 £'000 Reconciliation of net cash flow to movement in net funds Increase (decrease) in cash 14,334 (7,746)Cash outflow from decrease in lease financing 864 1,185 -------- --------Net cash flow in year 15,198 (6,561)Net (debt) funds at 31st December 2003 (5,026) 1,535 -------- --------Net funds (debt) at 31st December 2004 10,172 (5,026) -------- -------- Reconciliation of operating profit to operating cash flow 2004 2003 £'000 £'000 Operating profit 15,679 12,314Depreciation and amortisation 4,035 3,734Profit on sale of tangible fixed assets (877) (295)Increase in stocks (19,742) (12,193)Decrease (increase) in debtors 7,011 (15,899)Decrease in creditors and provisions (1,052) (767) -------- --------Net cash inflow (outflow) from operating activities 5,054 (13,106) -------- -------- Analysis of net funds At Cash At 31.12.03 Flows 31.12.04 £'000 £'000 £'000 Cash at bank 6,457 26,421 32,878Bank loans (10,173) (12,087) (22,260) --------Increase in cash 14,334Finance leases (1,310) 864 (446) -------- -------- -------- (5,026) 15,198 10,172 -------- -------- -------- NOTES 1. The financial information above has been extracted from the Company's statutory accounts for the years ended 31st December 2003 and 2004. Statutory accounts for the year ended 31st December 2003 have been delivered, and those for the year ended 31st December 2004 will be delivered, to the Registrar of Companies. The auditors of the Company have given unqualified reports on those accounts and such reports did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. 2. At the Board Meeting held on 5th April 2005 the Directors formally approved the issue of these statements. 3. The financial information has been prepared using accounting policies consistent with those adopted by the group in its accounts for the year ended 31st December 2003. 4. The Annual Report 2004 is to be published and sent to shareholders on 18th April 2005. Copies will be available from The Company Secretary, Henry Boot PLC, Banner Cross Hall, Sheffield, S11 9PD. 5. The Annual General Meeting of the Company is to be held at the Sheffield Park Hotel, Chesterfield Road South, Sheffield, S8 8BW on Thursday 19th May 2005 at 11.30 a.m. 6. The final dividend will be paid on 26th May 2005, with a record date of 13th May 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Henry Boot