31st Mar 2009 07:00
31 March 2009
RAVEN MOUNT GROUP PLC
("Raven Mount" or the "Company")
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2008
|
HIGHLIGHTS |
|||
| |
Group loss after tax was £7.8 million (2007: loss £2.2 million) on turnover on continuing operations of £13.8 million (2007: £59.5 million). |
||
| |
Disposal of interest in Independent Living business, Audley, for £15.0 million. |
||
| |
Disposal of Group's Russian Property Fund Management business for £15.0 million in cash and 80 million Raven Russia shares, of which 64 million were distributed to shareholders. |
||
| |
Buy-out of the Swan Hill Pension Scheme for £6.6 million. Total loss on disposal of the scheme £14.5 million. |
||
| |
£22.4 million net cash as at 31 December 2008 (2007: net debt £31.9 million). |
||
| |
Net assets as at 31 December 2008 £57.5 million (2007: £82.0 million) |
||
| |
No final dividend to be paid (2007: 1.4p). £18.7 million distributed to shareholders during the year (2007 final dividend and 64 million Raven Russia shares at 26.75p). |
||
|
Commenting on the results, Anton Bilton, Executive Chairman, said: |
|||
|
'We have been decisive, highly surgical and very focused on preserving the value of our balance sheet and proposals are now in place for our takeover by one of the businesses that we originally founded, Raven Russia.' |
|||
|
Bim Sandhu, Chief Executive, said: |
|||
|
'2008 was another busy year with the disposal of the Swan Hill Pension Scheme, the Internalisation of the Raven Russia Property Fund Management business, the restructuring and relisting of the Group and the disposal of the Audley Independent Living business all of which were transacted in increasingly difficult market conditions.' The prospects for Raven Mount shareholders will be very much tied up with the prospects of the Raven Russia business should shareholders approve the offer and will largely be determined by the macro factors which are essentially outside anyone's control. Should this proposal complete then we will certainly have achieved our 5 year strategy of completely reinventing the Swan Hill business that we took over.'
|
|||
|
Enquiries to: |
|||
|
Raven Mount Group plc |
020 7235 0422 |
||
|
Anton Bilton Bim Sandhu Mark Kirkland |
Executive Chairman Chief Executive Finance Director |
||
|
Shore Capital & Corporate Limited Nominated Adviser and Joint Broker Guy Peters Pascal Keane |
020 7408 4090 |
||
|
Oriel Securities Limited Joint Broker Michael Shaw Neil Langford |
020 7710 7600 |
||
Notes for Editors:
Raven Mount Limited (formerly Raven Mount plc) was founded in November 2003 by Anton Bilton (Executive Chairman), Bim Sandhu (Chief Executive) and Glyn Hirsch (Executive Deputy Chairman) and took control of Swan Hill Group PLC, the housebuilder, in December 2003 in a hostile takeover supported by Swan Hill's four largest shareholders.
In December 2004, shareholders approved the reversal of Anton Bilton and Bim Sandhu's private residential development company, Raven Property Holdings plc, for a total consideration of £39.9 million paid in Raven Mount shares, who then began a strategic reinvention of the business.
In July 2005, Raven Mount subscribed £10 million towards the £153 million flotation of Raven Russia Limited ('Raven Russia') on AIM. Raven Russia was formed at Raven Mount's instigation as a vehicle for institutional shareholders to invest in the Russian property market with an initial focus on the Warehouse property market in the Moscow and St Petersburg regions. Raven Mount's wholly owned subsidiary, Raven Russia Property Management Limited, acted at that time as the property adviser to Raven Russia. In April 2006, Raven Russia raised a further £310 million through the placing of 270 million shares at £1.15 per share.
In May 2008, Raven Mount announced the sale of the Swan Hill Pension Scheme (the 'Scheme') to the Pension Insurance Corporation Limited. In the terms of the sale Raven Mount agreed to pay an additional £7.25 million to the Scheme. The sum was payable in two tranches, £2 million immediately and £4.6 million plus interest was paid in January 2009. Following completion of the transaction the Company has no further exposure to the pension liabilities of the Scheme. The Scheme was the defined benefit pension fund of Swan Hill Group plc which was acquired by Raven Mount in December 2003.
In July 2008, Raven Mount announced the proposed disposal of Raven Mount's Russian Property Fund Management business to Raven Russia. This transaction was approved by Raven Mount shareholders, and completed on 26 November 2008.
In October 2008, Raven Mount announced the disposal of its interest in Audley for £15.0 million to a special purpose vehicle owned by the Moorfield Real Estate Fund II, the investment fund of Moorfield Group Limited ('Moorfield'). In addition, as part of the transaction, Moorfield agreed to take an assignment of the Company's Waterman's Business Park, Staines office lease.
Raven Mount currently has mainstream property residential schemes at Lewes, Brackley and Sheffield as well as the development of second homes projects through its joint venture in the Cotswolds, The Lakes and potentially, subject to planning, in Grand Bahama.
www.theravengroup.co.uk
www.thelakesbyyoo.com
www.ravenrussia.co.uk
Chairman's Statement
I doubt I need to remind any of you that 2008 was a dreadful year economically across the world! Accordingly, we have been decisive, highly surgical and very focused on preserving the value of our balance sheet and as you are aware proposals are now in place for a takeover by one of the businesses that we originally founded, Raven Russia.
The Raven Group journey has been a long and exciting haul with many adventures.
Therefore, I have chosen to focus my statement on giving thanks to everyone who has participated in that voyage and especially my long standing partner Bim without whose acumen, diligence, and constant hard work I'm sure our ship would have floundered on so many occasions. Thank you Bim.
I also want to thank Mark Kirkland, particularly for his help in negotiating the disposal of the Swan Hill Pension Fund to PIC and Glyn Hirsch for his continuing extraordinary efforts with Raven Russia.
Equally I want to thank the entire, wonderful, Raven "crew" for their hard efforts and for remaining by our sides in both treacherous as well as calmer waters. Thank you, all of you.
On a final point of thanks I wish to thank our non executive directors who have handled yet another "conflict" issue with such professionalism. Thank you James, Robert and Rory.
So how have we faired over Raven Mount's five year journey? Well, with the 52.5p of value from the proposed Raven Russia Offer (based on the issue price of each Unit comprising 1 preference share and 1 warrant pursuant to Raven Russia's recent placing) and inclusive of paid out dividends (including value of Raven Russia shares based on share price at Completion of the internalisation), we will have delivered a total of 80.8p to shareholders. On top of this one should also account for the 15p per share total pension fund cost (including contributions and buyout of £17.2 million) which we inherited from Swan Hill and which we managed to exit successfully on behalf of shareholders; which takes the effective Total Shareholder Return to 95.8p.
I believe this is a highly successful outcome for what was a small housebuilding business when we approached it at 60p and when compared to the performance of the quoted housebuilding sector which has shown a decline of over 65% during the comparable period.
I end this statement with a reference to my grandfather Percy Bilton. In 1973/4, when hearing that the Government had created a "lifeboat" to rescue the secondary (as opposed to today's primary!) banks he quipped "they should have instead sent out a gunboat and shot the lot!" The basis of human nature and the perpetual circularity of our actions mean that unfortunately I have to echo that comment today!
To all of you who have supported us this far on our voyage: Thank you.
Anton J G Bilton
Executive Chairman
31 March 2009
Chief Executive's Report
Results for the year ended 31 December 2008
2008 was another busy year with the disposal of the Swan Hill Pension Scheme, the Internalisation of the Raven Russia Property Fund management business, the restructuring and relisting of the Group and the disposal of the Audley Independent Living business all of which were transacted in increasingly difficult market conditions.
Following these transactions, Raven Mount Group plc generated a total accounting loss of £7.8 million for the year (2007: £2.2 million loss). The accounting loss would have been greater had it not been for the overall profit generated on the disposal of discontinued businesses. Having said that, the 'loss' in itself represents a misleading picture of the significant progress made during the year to preserve and enhance shareholder value.
One of the principal factors contributing to the loss was write-off of £14.5 million on the disposal of the Swan Hill Pension Scheme, which was £0.7 million lower than we had anticipated at the time of our Interim Report and of which £6.6 million represented the cash payment to PIC to take over the liability. Under the circumstances this was a great transaction for the Company given the significant fall in investment values we have seen since we agreed the deal (e.g. the FTSE 100 was nearer 6,300 rather than nearer 3,600!) and that if we had to undertake the transaction today the cash cost would, in all likelihood, be in excess of £20 million. We do not believe that our timing could have been any better - this was obviously down to an element of luck but I would like to think it is also a reward for our foresight in identifying the issue immediately after the takeover of Swan Hill and for then, together with the Independent Trustees, devoting considerable time, skill and effort to resolving it.
In addition, the loss was enhanced through an Impairment Charge, principally on our Raven Russia shareholding, on available for sale investments of £13.4 million. Under the perversity of the relevant accounting rules we have written £1.8 million of this loss through the balance sheet in prior years and are having to reverse it back through the balance sheet and charge it through this years profit and loss account to no net effect! While I am on the subject of the accounting rules, it is at least equally nonsensical, that we have £1.3 million being charged through the profit and loss account on the unamortised fair value of the options that have been cancelled and which will therefore not dilute shareholders' interests in future. One day someone may be able to explain the logic of it - what one should be doing is quite the opposite; which is reversing the charge made in prior years in respect of those cancelled options!
A third major factor in the loss has been the write-down in the value of our property stock by £13.4 million (2007: £2.9 million). Shareholders will recall that we have adopted a very bearish stance on the UK residential market for a long time and indeed we have not purchased any new residential assets in the UK, outside of our Assisted Living business, following the acquisition of Raven Property Holdings (RPH) in December, 2004. This is to our great credit; however it is also fair to say that we should have been far more ruthless in our approach to the residential assets acquired as part of the acquisition of our own RPH business and should have disposed of more of those assets (a significant disposal was the High Royds Hospital, Leeds site realising £8.6 million of cash) as and when planning permissions were obtained. Given our long held pessimism on the state of the markets, unfortunately we found ourselves scrambling up the foothills when the financial tsunami struck rather than standing on top of the mountain. We have paid for this mistake in the write-offs that we have now made.
There is also a significant increase in overheads contributing to the loss for the year, and this increase is largely attributable to the contribution payable into the Raven Mount EBT of £8.1 million, details of which have previously been provided to shareholders.
These significant contributors to losses have been offset to a large extent by the profit of £34.1 million made on the disposal of the Raven Russia Property Fund Management business; the majority of which was distributed to shareholders by way of the reconstruction undertaken last year, and the operating profits of £11.9 million made in the business prior to its disposal. It might seem strange in retrospect that we have disposed of a business which generated such significant profits on a less than 3 times multiple but shareholders will recall that the majority of the consideration was received in the form of shares in Raven Russia which fell significantly in value from when the deal was announced last summer to when the transaction was concluded in November. The notional profit at the time the transaction was announced was £83.4 million.
Overall, Net Assets decreased from £82.0 million as at 31 December 2007 to £57.5 million as at the year end. However, of the fall of £24.5 million, £18.7 million is accounted for by the final cash dividend for 2007 and the distribution to shareholders of 64 million Raven Russia shares at 26.75 pence. There are very few property companies of our size I can think of, if any, that will have distributed £18.7 million of value to shareholders during the year. In addition, adjusting for the £14.5 million charge on disposal of the Swan Hill Pension Scheme, more meaningfully shareholders funds would have increased by £8.7 million during the year which is a credible performance under the economic circumstances in which we find ourselves.
Perhaps more significantly than either the movement in the balance sheet or the profit and loss account in the current environment is that the Company eliminated its net debt and generated significant surplus cash which made it an attractive vehicle and has led indirectly to the proposal from Raven Russia.
Audley Independent Living
Shareholders will know we have been strong supporters of this concept since inception and as such some of you may wonder why we have disposed of Audley? The answer is very simple - the amount of cash required to see through the business plan, even a reduced one, was significantly greater than we were prepared to risk with our equity base as the credit markets shrank and the banks became reluctant lenders. Fortunately, we started investigating obtaining equity/mezzanine funding for the business at the beginning of 2008 and although originally very focused on retaining at least partial ownership we retained the flexibility to consider all options. Unfortunately, we lost two potential joint venture investors in the business in the Spring and then early Summer as they both became increasingly concerned about the state of the UK residential market and by the time we moved to the third party, the eventual purchaser, a Moorfield fund, the price was significantly reduced.
We eventually managed to achieve the sale of the business very early Saturday morning 11 October 2008 subject to satisfaction of certain conditions, notably bank consents. Those of you who can recall the financial turmoil of that week (some time before every week became a week of financial turmoil!) will wonder how it was achieved. Firstly, we sold a company with a great long term business model at a price significantly below the price we hoped to achieve to a party that had been seeking for some time, but unsuccessfully, to enter the market. Secondly, we were further 'chipped' on the price 24 hours before the proposed completion date and had the foresight to swallow our pride and accept it. Thirdly, the purchaser was a fund, with the manager no doubt under pressure to invest its funds, and this created a different dynamic than with a listed corporate entity which in all likelihood would have pulled out completely given the turmoil in the markets at that time. From our perspective, we received £15 million of cash and just as importantly removed exposure to drawn down bank debt of £43.2 million, and increasing, from our balance sheet. Nevertheless, I believe the purchaser has a business which, with sufficient funding and commitment, should become a great business in years to come. Good luck to them.
Property Fund Management
The Company announced on 9 July 2008 of its intention to sell this business to Raven Russia for £15 million in cash and 80 million shares in Raven Russia (valued then at 85.5 pence on announcement of the transaction) of which 64 million shares were transferred directly into the hands of Raven Mount shareholders through an unfortunately complicated but necessary restructuring process. The value, approximating £83.4 million at that time, represented an agreed discounted net present value of the future cash flows we could have expected from this business during the term of the contract. Unfortunately, following the dramatic collapse in share prices generally and property companies and those with exposure to Russia and Eastern Europe, the price of Raven Russia fell significantly during the period to complete the transaction and the booked profit of £34.1 million as a result was a significantly lower. However, this is not to say that the asset values of Raven Russia itself have fallen as significantly and that a significant element of the original value, if not more, may well be recovered by shareholders in future years if and when markets return to normality.
Residential Development
Construction work on the 149 unit Sheffield Phase 1, the 51 unit Brackley and 54 unit Lewes sites are now effectively construction completed.
With respect to Sheffield Phase 1 (www.kelhamriverside.com), prior to the year end we completed sales of 5 units at an average price of £121k per unit and since the year end we have completed on a further 20 units, representing in total £2.7 million of value (average of £136k per unit). We have currently exchanged sales on a further 19 units valued at approximately £2.6 million with 105 units remaining to be sold. On this site we are also actively pursuing a 'lease and buy' scheme where we are giving purchasers who are having difficulty arranging a mortgage the opportunity to let a flat for at a normal commercial rate with an option to buy the property at a fixed price within a 12 month period of time. We are able to do so as we do not have the cash pressures of other housebuilders. The advantages of the scheme are that activity is created on site, we do not have to incur the costs of purchasing furniture for the flats, people have a greater incentive to look after the flats as they are looking to purchase them and we are offering to offset the rent that they have paid against the purchase price should they complete giving them less incentive to move to alternative accommodation. This strategy enables us to earn a higher return than we would do from placing the cash from any sales proceeds on deposit and also increases the potential to realise maximum value from the eventual sale of the unit. We have not and do not for the foreseeable future expect to commence development on the 339 unit Sheffield Phase 2 site.
On the 54 unit Lewes scheme (www.theprintworkslewes.co.uk) we completed on the sale of 14 social housing units and 16 private housing units totalling sales revenue of £5.8 million during the year. Since the year end we have completed on the sale of a further unit. Development of the 51 unit residential site in the centre of Brackley (www.collegeplacebrackley.co.uk), has now essentially completed and whilst a number of purchasers wish to purchase they can only do so after they have sold their own units.
Our second home scheme at Coln Park, Lechlade in the Cotswolds (www.thelakesbyyoo.com) continues to perform relatively well. We currently have planning permission for a hotel and 160 second homes, of which 93 currently have detailed consent, although we are currently seeking changes to this consent. The structure of the Coln Project is slightly unusual, being a second home development, in that purchasers are asked to purchase the land upfront and then to make stage payments during the construction process. Whilst unusual, the cash flow implications for us as developers are very positive and ensures that working capital tied up in the site is considerably less than it would be on a normal residential development of a similar size. During the year there were 19 land completions which generated income of £5.8 million with a further £8.0 million of income generated from building stage payments on those units. We also have a number of units under offer.
Swan Hill Pension Scheme
In May 2008, the Company announced that it had supported the Directors (including myself) of the Trustee of the Swan Hill Pension Scheme ('the Scheme') in entering into an agreement with Pension Insurance Corporation Limited ('PIC') for a full insurance buy-out of the Scheme. In order to facilitate the buy-out the Company has paid an additional £6.6 million into the scheme of which £4.6 million was paid in January 2009. The Swan Hill Pension Scheme has been a significant drain on Company resources as we have made contributions of £17.2 million, almost all cash, into the Scheme since the takeover in December 2003, as well as paying additional amounts for administrative costs.
In addition, shareholders will recall the significant time and resources we have devoted to the issue as well as the extensive analysis of the Scheme that we have included in the accounts and my own reports in past years, particularly in my 2005 Report. Even then I believe that it is difficult to grasp the risks associated with final salary schemes for sponsoring employers. I think many companies (and analysts) simply bury their head in the sand and pay lip service to the issue. Part of the reason for this is that it is regarded as a long term issue and perhaps a problem for future managers rather than current ones. Indeed we were advised by our own personal lawyers before the transaction that reversed RPH into Raven Mount not to undertake it because of the unquantifiable risks, and a cocktail of them, associated with the pension scheme. Now that we appreciate the matter more fully, and if anything the risks having increased, there is no doubt that I would endorse the advice that we were given and yet choose to ignore. I reiterate what I said in the 2005 Report that although at the time it was debatable whether the RPH acquisition was a good one for RPH shareholders or RM shareholders there was no doubt that it was a good one (I would now say a great one) for members of the Scheme. This is emphasised by the increasing deficits for final salary schemes; the PPF recently said that final salary schemes in the private sector have a deficit of £219 billion as at February 2009. This will put increasing pressure on companies just when their cash flows are being squeezed more than ever before in my business life. There will also be increasing financial pressures on the PPF itself as companies fail; the cost of which is borne by the remaining defined benefit schemes in that the levy charged on them will increase, thereby creating a vicious circle.
Cash Flow & Banking - 'Neither a borrower nor a lender be'
In my 2007 Report I emphasised the vital importance of the banking system to the UK property industry and assessed the impact of the problems they were then already experiencing on our businesses. Events since last year have only served to highlight the significance of that statement and its application to the whole of business life, whichever industry one happens to be in. The efficient working of the banking sector is vital to all of us and we all have a vested interest in making sure that it returns to normality as soon as possible. In doing so a certain amount of catharsis is needed. It is vital to identify and highlight the mistakes of today; so that they are not repeated by the bankers of tomorrow.
A lot has been said and written about banks and bankers particularly since last summer, very little of which has been complimentary (now at least they know how developers feel when confronted by planners and locals at town hall meetings!). As with all general categorisations and prejudices it is very sad and hurtful to the vast majority of people, at all levels, in the banking sector who are hardworking, act with great integrity and who too have seen very large proportions of their wealth disappear with collapsing share prices and effective nationalisations due to incompetence and greed. To those I make an immediate apology as I will be adding my own thoughts in respect of a significant minority who are not so.
The banking sector is playing one big version of game theory on a very non-optimal basis; the banks are all adopting policies where they stand in the box which says 'self interest' hoping everyone else stands in a different box; however when you peel back the 'self interest' label the box in which they all find themselves actually says 'self destruction'. Unfortunately a banking self destruction means destruction for the rest of us. We now find ourselves in a place where the only way to rescue the situation is direct government intervention to get liquidity flowing and that represents a significant failure of the capitalism. Karl Marx wrote in Das Kapital in 1867 "Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the State will have to take the road which will eventually lead to communism". Whilst I would not quite go that far there is a certain sense of irony that we are in takeover talks with a Russian based business.
Whist there is no doubt that the bonus culture in banking in prior years encouraged bankers to lend more and more money and sometimes clients, such ourselves, were encouraged to delay signing finance deals when a bonus target had already been met so that transactions (and therefore bonuses) could be booked in a subsequent period; we now have a serious danger that an equally pernicious structure is in place which incentivises lending managers in banks to reduce their loan books and in seeking to do so some are certainly doing so with little regard to legal agreements or morals or consequences or client relationships which they have spent many years preaching and encouraging. The remuneration structure for bankers seems to have moved straight from a carrot and carrot approach to a stick and stick approach without pausing for breath in between. Either structure is sub-optimal and leads to perverse decision making by bankers i.e. dealing with their clients. I feel this matter has not been sufficiently highlighted in the media.
There is a general and systematic failure in the banking system at macro level and a lack of a moral compass in trying to control or now resolve matters at a micro level. I will just give some examples that we ourselves have directly experienced in the past year either in Raven or in a private capacity and I would emphasise that these are all examples from the UK banking system for those who like to think that UK banks would not behave in this manner.
* The bank manager that first tried to claim breaches of a loan agreement claiming a full termination of the loan when the 'breach' was actually an event that was hugely beneficial to the bank and removed a risk that they had previously been very concerned about and reduced the facility for and a 'breach' that they had not objected to when informed prior. When this was pointed out to them they claimed that there were 'several' other breaches which they then would not quantify and only backed down on when they were served with a drawdown notice and told that if the funds were not in our account within 24 hours that they would be sued for breach of contract and an announcement made to shareholders. Even then they only consented to the drawdown whilst still maintaining their stance that we were in breach and trying to pretend that they were doing us some sort of favour in allowing us to drawdown. When informed that we wanted these breaches identified as we had an obligation to tell a regulator and our shareholders of the precise nature of the alleged breaches they backed down completely and said that there was a misunderstanding and that in fact there were no breaches whatsoever! When I subsequently asserted to a more senior manager that I believed them to have acted 'fraudulently' in attempting to withdraw a facility which had been paid for all he would admit to is that they had made a 'mistake' and regretted the approach that they had adopted. Such contrition did not however change their general approach one iota. This was an example of a bank manager trying to reduce the loan, and at that stage a low risk loan to a well capitalised and cash rich company, no doubt to hit his targets in order to preserve his job either not knowing or not caring that in similar circumstances for other companies it could potentially result in the loss of hundreds of jobs.
* The bank that made us spend several weeks on a valuation exercise that they were hoping would come in at a level that would have meant that they did not have to advance more funds and saying that the valuation was irrelevant when it came in at a level that gave them the 'wrong' answer. They then proceeded to offer a loan facility where they offered to lend the money provided that we put in some money first (ok), provided guarantees for the entire amount (only sort of ok given that that they also had security over the asset that was proposed to be constructed) but then asking to cash collateralise the guarantee every time we wanted to draw down (NOT OK!) i.e. we had to lend them £1 first before we borrowed £1 from them! And for lending us our own money they proposed to charge a fat margin with fat fees!
* The bank that was approached (that we had not previously dealt with at Raven although they were well known to us) with a view to depositing several million pounds of our surplus cash with them and with a view that some time in the future we would like to help look at some of their problem loans and potentially borrow money only to be told by a rather embarrassed contact that the Treasury side of the bank were not keen to take our deposits and that the Property side were not keen to lend or even establish any new contacts. Polonius's advice to his son, 'Neither a lender nor a borrower be' (Hamlet Act 1 Scene 3), was not one that you would have expected to be taken to heart by banks whose raison d'être was supposed to be to borrow at one rate and lend at a higher one!
* The bank whose automatic reaction to being notified, out of courtesy, of a change of control was to ask for the margin to be increased on the entirety of the loan despite the fact that (i) the change of control provision did not apply under the terms of the loan agreement (ii) the transaction proposed would have led to the said entity having a considerably more cash rich parent better able to fund its operations and (iii) the said bank was a shareholder in the bidder!!
The last point demonstrates the lemming like mentality of the banks at the moment to ask for increased margins if there is any change (and we are talking beneficial or non beneficial) to the terms of a loan agreement; many agreed and negotiated on the basis that as banks they would act honourably and the clauses were standard clauses to deal with clients who were not very ethical in their dealings. I would ask the banks how they expect companies and individuals to act towards them when they set such low standards for behaviour and act so irrationally and without thought. What happened to 'my word is my bond'?
It has been (jokingly?) suggested that it may currently be better to borrow from the Mafia than the banks as the interest rates are likely to be lower, the repayment date is known, you know what happens when you do not pay, they have the money to lend to you and a handshake is honoured (whereas the banks struggle to honour written contracts) and you generally know where they are coming from. As I started this section by stating, my intent is not to denigrate the vast majority of honest and hard working people in the banks concerned as many of them are as equally ashamed by the behaviour of their own managers and/or credit committees and for that reason I have not attributed the above behaviour to the banks concerned. Nevertheless, as this is likely to be my final report as CEO I am happy to reward any shareholder who actually reads this report with a £10,000 donation to a charity of their choice if they can identify the banks concerned. One entry per shareholder!! In the event of a tie, the prize will go to the reader who can name the bank I dealt with in the early 1990s which asked for a £2 million loan to be repaid which was secured on a property which had been valued at more than that and whose security was supported by a floating charge over a further £100 million plus of assets with no other debt (gearing of 1.9%!) claiming breaches in ratios which had originally been put in place for a syndicated £50 million facility - this demonstrates that the nature of the beast has not changed almost 20 years later! Failing a winner I shall contribute the money to the Bankers Benevolent Fund. I would like the above to serve as examples to future businesses and businessmen that the only thing you will have to rely on is the legal contract that you enter into with a bank (and you have to be prepared to enforce it) and to read the small print very carefully.
Our thoughts and sympathies go to all those companies currently being treated in a similar manner, including by those effectively nationalised who say otherwise, and are not in a position to 'punch' the banks back when needed to.
Dividends
The Directors have given undertakings to the board of Raven Russia that the Company will not pay any further dividends prior to the finalisation (or otherwise) of the transaction with Raven Russia.
Prospects
The world finds itself facing an economic chasm and as David Lloyd George once alluded you can't jump a chasm in small steps; someone (inevitably government) needs to build some strong and sturdy bridges and until that happens the prospects for all businesses remain generally bleak.
The prospects for Raven Mount shareholders will be very much tied up with the prospects of the Raven Russia business should shareholders accept the offer that is proposed to be made to them and further details on those prospects and the associated risks will be set out in the offer document from Raven Russia which shareholders are expected to receive shortly. The prospects will largely be determined by the macro factors which are essentially outside anyone's control. Should this proposal complete then we will certainly have achieved our 5 year strategy of completely reinventing the Swan Hill business that we took over. Whilst we have not achieved the returns that we would have hoped to achieve when we first set out; neither have we ended up destroying value in the way that many of our peers have and hopefully we will be going forward as part of a business which has huge potential and is currently significantly undervalued. So we have done relatively well and therefore probably a B+ for achievement and an A for effort. On that note I should like to take the opportunity to thank my fellow directors and the many employees who have contributed to getting us to this position.
Looking at Raven Mount Group in isolation, prospects will continue to be governed by the UK economy which remains weak, the residential sector which remains weak and the banking sector which remains even weaker. However, we have put the Company on a very stable footing where it has surplus cash, is not reliant or beholden to on any third party to maintain its survival and which will continue to generate surplus cash through the disposal of its completed developments There are likely to be many opportunities in the UK market for those with the cash resources and nerves to exploit them. Somewhat ironically, I shall sign off with a quote from the US banker David Rockefeller which is still applicable today: 'Success in business requires training and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were'.
Bim Sandhu
Chief Executive
31 March 2009
Finance Director's Report
Overview of results
The Group generated a loss on continuing ordinary activities before taxation of £51.7 million (2007: loss of £3.3 million) for the year to 31 December 2008, based on turnover of £13.8 million (2007: £59.5 million from continuing operations). The result for 2008 includes a £13.4 million impairment charge on the Group's available for sale investments, a £13.4 million write down of inventories, a bonus provision of £8.1 million and a £14.5 million charge for the closure of the pension scheme.
During the year the Group sold its Independent Living business, Audley, and its Russian Property Fund Management business. These businesses have been included in discontinued operations, the total profit of which was £39.1 million (2007: £1.1 million). The results of these discontinued operations prior to disposal are summarised in note 7 of the financial statements.
In October 2008, Raven Mount completed the sale of its 75% interest in Audley in consideration for £15,000 in cash and the repayment in full of certain mezzanine loan indebtedness of £14,985,000 owed by Audley to Raven Mount, generating a loss after taxation including its operating result for the period of £7.0 million. The Group's Russia Property Fund Management business was sold in November 2008 and generated a profit including its operating result for the period of £46.1 million.
The total loss for the year was £7.8 million (2007: £2.2 million).
Accounting issues and policies
The accounts have been prepared using 'Reverse Acquisition Accounting', which results in the Group financial statements showing the performance of Raven Mount Limited (formerly Raven Mount plc) for the whole period i.e. pre and post the acquisition by Raven Mount Group plc, the new parent company. In November 2008, a new parent company was created in connection with the Group's disposal of its Russian Property Fund Management business which resulted in the distribution of Raven Russia Limited shares to shareholders. The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
Pension fund
In May 2008, Raven Mount announced that the Trustees of the Swan Hill Pension Scheme, with the support of Raven Mount, had entered into an agreement for a full insurance buy-out of the Swan Hill Pension Scheme. In order to facilitate the buy-out, Raven Mount agreed to pay an additional £6.6 million to the Swan Hill Pension Scheme, £2.0 million of which was paid on 28 May 2008 and the balance of £4.6 million plus interest was paid in January 2009. In addition, Raven Mount will have to pay further costs in the course of the winding up of the Swan Hill Pension Scheme; a process which is currently expected to be completed by this summer. Following the winding up of the Swan Hill Pension Scheme, the Group will have no further exposure to the pension liabilities of the Swan Hill Pension Scheme.
Capital structure
A total of 5,728,729 of the Group's own Ordinary shares were purchased, 5,532,729 at 12 pence per share and 196,000 shares at 10 pence per share during the year.
As at 31 December 2008, the Company had 108,670,588 Ordinary shares in issue.
Cash and bank facilities
As at 31 December 2008, net cash was £22.4 million (2007: net debt £31.9 million). This excludes debt in jointly controlled entities, which at the year end amounted to £7.0 million, relating to the Group's venture with Yoo Limited on The Lakes, Cotswold project. At the year end, the Group had unsecured committed bank facilities totalling £20.0 million, subject to fulfilling certain criteria, of which £15.0 million was drawn down at the year end. This facility was cancelled by the Group in February 2009.
Financial Review
Income Statement
Revenue
During 2008, the Group had revenue from continuing operations of £13.8 million (2007: £59.5 million), which resulted from Residential development, including £0.7 million (2007: £nil million) relating to land sales. The main contributors to revenue during the year being residential sales at Lewes, (£5.8 million) and Brighton (£5.3 million), neither of which, however, contributed to net profits.
Administrative expenses
Administrative expenses have increased during 2008 to £15.7 million (excluding the cost of sale of the pension scheme) (2007: £6.7 million). The main contributory factor being that staff costs increased following the agreement of a £8.1 million contribution payable to the Raven Mount EBT.
Finance income
Dividend income of £1.1 million was received in respect of our Raven Russia Limited and Oriel Securities Limited shares.
Taxation
There is no UK corporation tax liability for 2008 due to the availability of losses within the Group, and the disposal of the Russian Property Fund Management business not being taxable.
Dividends
In 2008, shareholders received dividend payments totalling 1.4 pence per Ordinary share (2007: 1.8 pence). In addition, as part of the disposal of the Russian Property Fund Management business, 64 million Raven Russia Limited shares were dividend directly to Raven Mount shareholders, equating to 0.55945 Raven Russia shares for each Raven Mount share.
Loss per share
Basic loss per Ordinary share was 6.9 pence (2007: loss 2.0 pence) based on the loss after tax of £7.8 million (2007: loss of £2.2 million) and on 112.1 million (2007: 110.1 million) Ordinary shares being the weighted average number of Ordinary shares in issue during the year.
Balance sheet
Inventories
Total inventories as at the year end were £34.8 million (2007: £83.6 million).
During the year the Group sold its Audley Independent Living business, which accounted for a fall in inventories of £56.6 million at the date of disposal.
Given current market conditions, the Group decided to make a £13.4 million provision against its residential inventories, leaving a carrying value of £34.8 million (2007: £83.6 million), the major items being Sheffield I and II (£20.0 million), Brackley (£7.7 million) and Lewes (£4.5 million).
The Group continues to assess its options with regard to its Sheffield II residential development.
Available for sale investments
As at the year end, the Group held 29 million Raven Russia Limited shares, at a cost of £17.7 million. Based on the year end Raven Russia Limited share price of 23.75 pence per share, the market value of these shares totals £6.9 million (2007: £11.2 million).
The Group continued to hold its minority stake of 2.4 million shares in Oriel Securities Limited ("Oriel"), an independent stockbroking and advisory business. At the year end these were valued at £2.2 million. Although market conditions are not ideal for an imminent exit, Oriel's strong market position makes it an attractive company within the sector and we will continue to monitor our options.
In accordance with IAS39 the significant reduction in value of these assets totalling £13.4 million has been recognised in full in the income statement including the reduction from earlier periods previously recognised through reserves.
Shareholders' funds
Shareholders' funds at the year end decreased to £57.5 million (2007: £82.0 million). The principal movements were the £14.5 million loss on the sale of the pension scheme, the dividend payments of £18.7 million, the impairment charge on the available for sale investments of £13.4 million, the £13.4 million write-down of inventories and the £3.5 million loss on the sale of the Audley business being offset by the £34.1 million profit on the sale of the Group's Russian Property Fund Management business.
Shareholder return
The share price decreased from 83.25 pence to 13.5 pence per Ordinary share over the year, (a decrease of 83.8 per cent.), and taking into account receiving dividends of 1.4 pence and 0.55945 of a Raven Russia Limited share per Ordinary share during the year, this giving a total shareholder return of negative 66.1 per cent.
Mark Kirkland
Finance Director
31 March 2009
|
Consolidated Income Statement |
|||||||||
|
For the year ended 31 December 2008 |
|
Total |
||||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||
|
Note |
£'000 |
£'000 |
||||||||||||||||
|
Continuing |
||||||||||||||||||
|
Revenue |
1 |
13,842 |
59,511 |
|||||||||||||||
|
Cost of sales |
(24,073) |
(58,502) |
||||||||||||||||
|
Gross (loss)/profit |
(10,231) |
1,009 |
||||||||||||||||
|
Administrative expenses |
||||||||||||||||||
|
- Cost of closure of pension scheme |
3 |
(14,476) |
- |
|||||||||||||||
|
- Other |
(15,712) |
(6,676) |
||||||||||||||||
|
Total Administrative expenses |
(30,188) |
(6,676) |
||||||||||||||||
|
Impairment charge on available for sale investments |
(13,360) |
- |
||||||||||||||||
|
Group operating loss |
4 |
(53,779) |
(5,667) |
|||||||||||||||
|
Finance income |
|
5 |
3,777 |
|
6,277 |
|||||||||||||
|
Finance cost |
5 |
(2,837) |
(3,630) |
|||||||||||||||
|
Share of profit/(loss) of jointly controlled entities |
1,172 |
(324) |
||||||||||||||||
|
Loss before tax |
(51,667) |
(3,344) |
||||||||||||||||
|
Tax |
6 |
4,743 |
2,329 |
|||||||||||||||
|
Loss for the year on continuing activities |
(46,924) |
(1,015) |
||||||||||||||||
|
Discontinuing |
||||||||||||||||||
|
Profit/(loss) on discontinued operations, net of tax |
7 |
39,135 |
(1,149) |
|||||||||||||||
|
Loss for the year |
(7,789) |
(2,164) |
||||||||||||||||
|
|
||||||||||||||||||
|
Basic loss |
||||||||||||||||||
|
per Ordinary share |
9 |
(6.9) |
p |
(2.0) |
p |
|||||||||||||
|
Consolidated Statement of Recognised Income and Expenses |
|||||||||||||
|
For the year ended 31 December 2008 |
|||||||||||||
|
2008 |
2007 |
||||||||||||
|
£'000 |
£'000 |
||||||||||||
|
Losses on revaluation of available for sale investments recognised in equity |
23 |
(a) |
- |
(3,769) |
|||||||||
|
Pension scheme actuarial gain |
- |
3,199 |
|||||||||||
|
Deferred tax on items taken directly to equity |
6 |
(369) |
178 |
||||||||||
|
Loss for the year |
(7,789) |
(2,164) |
|||||||||||
|
Total recognised income and expense in the year |
(8,158) |
(2,556) |
|||||||||||
|
Consolidated Balance Sheet |
||||||||||||
|
As at 31 December 2008 |
||||||||||||
|
2008 |
2007 |
|
||||||||||
|
Note |
£'000 |
£'000 |
||||||||||
|
Non current assets |
||||||||||||
|
Property |
10 |
- |
4,229 |
|||||||||
|
Plant and equipment |
10 |
|
67 |
966 |
||||||||
|
Investment in jointly controlled entities |
11 |
2,528 |
42 |
|||||||||
|
Deferred tax assets |
20 |
583 |
2,827 |
|||||||||
|
Retirement benefit surplus |
3 |
- |
5,027 |
|||||||||
|
3,178 |
13,091 |
|||||||||||
|
Current assets |
||||||||||||
|
Inventories |
12 |
34,762 |
83,586 |
|||||||||
|
Trade and other receivables |
13 |
7,463 |
21,177 |
|||||||||
|
Available for sale investments |
14 |
9,066 |
16,335 |
|||||||||
|
Cash and cash equivalents |
15 |
37,538 |
4,392 |
|||||||||
|
Total current assets |
88,829 |
125,490 |
||||||||||
|
Total assets |
92,007 |
138,581 |
||||||||||
|
Current liabilities |
||||||||||||
|
Trade and other payables |
16 |
(17,791) |
(11,951) |
|||||||||
|
Bank loans and overdrafts |
17 |
(15,134) |
(18,330) |
|||||||||
|
Short-term provisions |
19 |
(1,048) |
(1,593) |
|||||||||
|
Total current liabilities |
(33,973) |
(31,874) |
||||||||||
|
Non current liabilities |
||||||||||||
|
Bank loans |
- |
(17,968) |
||||||||||
|
Deferred tax liabilities |
20 |
(583) |
(6,767) |
|||||||||
|
Total non current liabilities |
(583) |
(24,735) |
||||||||||
|
Total liabilities |
(34,556) |
(56,609) |
||||||||||
|
Net assets |
57,451 |
81,972 |
||||||||||
|
Equity |
||||||||||||
|
Called up share capital |
21 |
114 |
118 |
|||||||||
|
Share premium account |
23 |
(a) |
- |
2,418 |
||||||||
|
Other reserves |
23 |
(b) |
102,654 |
99,974 |
||||||||
|
Retained earnings |
23 |
(a) |
(45,317) |
(20,538) |
||||||||
|
Total equity |
57,451 |
81,972 |
||||||||||
The financial statements were approved by the Board of Directors and authorised for issue on 31 March 2009.
|
A J G Bilton |
B S Sandhu |
|
Executive Chairman |
Chief Executive |
|
Consolidated Cash Flow Statement |
||||||||||
|
For the year ended 31 December 2008 |
||||||||||
|
2008 |
2007 |
|||||||||
|
Note |
£'000 |
£'000 |
||||||||
|
Loss before tax |
(51,667) |
(3,344) |
||||||||
|
Operating profit attributable to discontinuing operations |
10,026 |
(1,472) |
||||||||
|
Finance income |
(3,777) |
(6,375) |
||||||||
|
Finance cost |
|
2,837 |
4,445 |
|||||||
|
Share of (profit)/loss of joint ventures |
(1,172) |
324 |
||||||||
|
(43,753) |
(6,422) |
|||||||||
|
Adjustments for non-cash items: |
||||||||||
|
Impairment of available for sale investments |
13,360 |
- |
||||||||
|
Depreciation charge |
156 |
260 |
||||||||
|
Share-based payment charge |
1,695 |
671 |
||||||||
|
Pension scheme |
10,130 |
- |
||||||||
|
Operating cash flows before movements in working capital |
(18,412) |
(5,491) |
||||||||
|
Decrease in provisions |
|
(545) |
(301) |
|||||||
|
Increase in inventories |
(7,752) |
(18,481) |
||||||||
|
Decrease/(increase) in receivables |
4,701 |
(4,841) |
||||||||
|
Increase in payables |
6,916 |
2,967 |
||||||||
|
Pension contributions |
(4,346) |
(1,799) |
|
|||||||
|
(1,026) |
(22,455) |
|||||||||
|
Net cash flows from operating activities |
(19,438) |
(27,946) |
||||||||
|
Investing activities |
||||||||||
|
Disposal of subsidiaries, net of cash disposed |
28,193 |
- |
||||||||
|
Interest received |
726 |
450 |
||||||||
|
Dividends received |
584 |
437 |
||||||||
|
Purchase of available for sale investments |
- |
(297) |
||||||||
|
Amounts invested in jointly controlled entities |
- |
(5,166) |
||||||||
|
Amount received from jointly controlled entities |
5,618 |
- |
||||||||
|
Proceeds on disposal of plant and equipment |
- |
74 |
||||||||
|
Purchase of property |
- |
(4,265) |
||||||||
|
Purchase of plant and equipment |
(267) |
(901) |
||||||||
|
Net cash flows from investing activities |
34,854 |
(9,668) |
||||||||
|
Financing activities |
||||||||||
|
Tax paid |
(46) |
- |
||||||||
|
Interest paid |
(2,825) |
(1,067) |
||||||||
|
Dividends paid |
(1,565) |
(1,991) |
||||||||
|
Purchase of own shares |
(687) |
- |
||||||||
|
New bank loans raised |
26,049 |
17,968 |
||||||||
|
Repayment of bank loans |
- |
(7,287) |
||||||||
|
Net cash flows from investing activities |
20,926 |
7,623 |
||||||||
|
Net increase/(decrease) in cash and cash equivalents |
36,342 |
(29,991) |
||||||||
|
Cash and cash equivalents at beginning of year |
(13,938) |
16,053 |
||||||||
|
Cash and cash equivalents at end of year |
25 |
22,404 |
(13,938) |
|||||||
Notes to the financial statements
|
1. |
Segmental analysis |
|||||||||
|
In previous years and during 2008 the Group operated in two business segments, namely Residential and other property development and Property fund management of Russian properties. However, during the year the Group sold the Russian Property Fund Management business and its results are disclosed in discontinued activities (note 7). Accordingly, the Group has only one business segment at 31 December 2008, being Residential and Other Property development. The Directors consider that the disclosure requirements of IAS14 in respect to its remaining business segment are sufficiently included within the continuing activities of the income statement, the consolidated balance sheet and the corresponding notes to the financial statements. |
||||||||||
|
2. |
Employee information |
|||||||||
|
(a) |
The average number of persons employed by the Group during the year was 157 (2007: 130). The total number of employees of the Group at 31 December 2008 was 39 (2007: 145). |
|||||||||
|
2008 |
2007 |
|||||||||
|
£'000 |
£'000 |
|||||||||
|
(b) |
Group employment costs including Directors: |
|||||||||
|
Gross salaries and wages |
6,808 |
6,974 |
||||||||
|
Contribution payable to EBT |
8,100 |
- |
||||||||
|
Employer's national insurance contributions or foreign equivalents |
785 |
750 |
||||||||
|
Equity settled share based payments charge (note 22) |
1,695 |
671 |
||||||||
|
Employer's pension costs |
269 |
225 |
||||||||
|
17,657 |
8,620 |
|||||||||
|
Key management and personnel, as defined under IAS 24 'Related Party Disclosures' have been identified as the Board of Directors as the controls operated by the Group ensure that all key decisions are reserved for the Board. |
||||||||||
|
On 28 January 2009, in line with the policy outlined in Raven Mount Group's AIM Admission document dated 31 October 2008 (which provides for 20 per cent. of the cumulative net profits arising from the Russian Property Management business to be paid as a performance share), the Remuneration Committee of Raven Mount Group approved the payment of a contribution for the year ended 31 December 2008 with a value of £8.1 million to the Employee Benefit Trust of Raven Mount Limited, a wholly-owned subsidiary of Raven Mount Group, ("EBT"). The beneficiaries of the EBT include the executive directors of Raven Mount Group plc, being Anton Bilton, Bim Sandhu, Glyn Hirsch and Mark Kirkland and other employees of the Group. This contribution has been accrued in Raven Mount Group's 2008 year end balance sheet, but not allocated between employees, and is payable whether the Possible Offer by Raven Russia Limited (as referred to in the Chief Executive's statement) is made or not. Raven Mount and Raven Russia have therefore agreed that, should the Possible Offer be made and become or be declared wholly unconditional, the liability to pay the contribution to the EBT will remain with Raven Mount Group until immediately after such time, when it will be discharged by Raven Russia through the issue to the EBT of the same consideration and on the same terms as under the Possible Offer, namely by the issue of 8.1 million Units (a unit comprising one £1 preference share and one Warrant in Raven Russia Limited). The trustee of the EBT will then allocate the contribution in accordance with the terms of the EBT Trust Deed. Details of the arrangements relating to the discharge of the liability by Raven Russia are set out in the offer announcement for Raven Mount by Raven Russia under Rule 2.5 of the City Code and any Offer Document. |
||||||||||
|
(c) |
Directors' remuneration (including non-executives) was: |
|||||||||
|
Emoluments |
1,139 |
1,091 |
||||||||
|
Pension contributions |
209 |
165 |
||||||||
|
Equity settled share based payments charge (see note 22) |
421 |
421 |
||||||||
|
Total |
1,769 |
1,677 |
||||||||
|
Gains on exercise of share options |
- |
- |
||||||||
|
In addition to the above, the Executive Directors are also potential beneficiaries of a share of an £8.1 million contribution to the EBT, Further details are given in note 2(b) above. |
||||||||||
|
3. |
Pension scheme |
|||||||||
|
On 28 May 2008 the Trustees of the Swan Hill Pension Fund ("Scheme"), in conjunction with the Group, sold the Scheme to the Pension Insurance Corporation Limited at a cost to the Group of £6.6 million. The effect of this transaction is a charge to the income statement of £14.5 million comprising the £6.6 million additional contribution, £5.0 million balance sheet surplus of pension assets over pension liabilities, £0.5 million net interest received on the assets and liabilities of the Scheme (from 1 January to the date of sale of the Scheme), 2008 contributions to the Scheme of £1.8 million and associated costs of £0.6 million. Of the total buy out cost of £6.6 million, £2.0 million was paid in the year and £4.6 million was paid on 5 January 2009 in full and final settlement. |
||||||||||
|
Defined benefit scheme |
|||||||||||
|
Benefit accruals under the Group's final salary pension scheme ceased with effect from 31 December 2005. The Group paid contributions until the pension fund was disposed on 28 May 2008 as detailed above in order to provide security for existing pensions and the accrued benefits of current and former employees. Group contributions to the scheme for the period totalled £1.8 million (2007: £1.7 million). Following the latest actuarial valuation as at 5 April 2005, the Group's contributions were fixed at £1.8 million per annum (including £0.2 million towards administrative expenses) for six years from 1 January 2006, after which they were expected to reduce to those required to meet the scheme's administration expenses. The next actuarial valuation of the pension scheme was due on 5 April 2008 but did not take place as the Group sold the pension scheme on 28 May 2008 as detailed above. The net credit to finance income in the income statement for the scheme was £0.5 million (2007: credit £1.2 million). (See note 5). As at 31 December 2008, the scheme had been sold and there is no IAS 19 surplus or deficit (2007: IAS 19 surplus of £5.0 million leading to the inclusion in the balance sheet of a net retirement benefit surplus, after deferred tax, of £3.6 million). The total actuarial gain recognised in the statement of recognised income and expense is £Nil (2007: gain of £2.3 million) after deferred tax. These amounts and those set out below have been determined on the advice of qualified actuaries, who are employees of Watson Wyatt Limited, based on the most recent full actuarial valuation at 5 April 2005 updated to 31 December 2007. The mortality assumptions adopted were in line with standard tables PMA92/PFA92 calendar year 2005 treating members as being one year older than their actual ages. An allowance was made for possible future mortality improvements equivalent financially to a reduction in the discount rate of 0.25 per cent. per annum. This is broadly equivalent to an increase in life expectancy of one year every ten years. |
|||||||||||
|
The financial assumptions used for IAS 19 purposes were: |
|||||||||||
|
2008 |
2007 |
||||||||||
|
% per |
% per |
||||||||||
|
annum |
annum |
||||||||||
|
Price inflation |
- |
3.3 |
|||||||||
|
General salary and wage inflation |
- |
n/a |
|||||||||
|
Pension increases |
- |
3.3 |
|||||||||
|
Discount rate |
- |
6.0 |
|||||||||
|
|
|||||||||||
|
The IAS 19 valuation assumes that mortality in retirement will be in the line with standard tables. The tables used are PMA92/PFA92 projected to calendar year 2005, with a + 1 year age rating. An allowance is also made for anticipated future improvements in life expectancy by reducing the discount rate by 0.25% pa. The allowance made for future improvements in mortality is subjective and there are differing views on the rate and extent to which mortality improvements will continue in the future. |
|||||||||||
|
2008 |
2008 |
2007 |
2007 |
||||||||||||||||||||||||
|
Expected |
Market |
Expected |
Market |
||||||||||||||||||||||||
|
rate of return |
value |
rate of return |
value |
||||||||||||||||||||||||
|
% per annum |
£m |
% per annum |
£m |
||||||||||||||||||||||||
|
Equities |
- |
42.4 |
|||||||||||||||||||||||||
|
Bonds |
- |
20.6 |
|||||||||||||||||||||||||
|
Property |
- |
0.8 |
|||||||||||||||||||||||||
|
Cash |
- |
3.4 |
|||||||||||||||||||||||||
|
Total |
- |
- |
7.6 |
67.2 |
|||||||||||||||||||||||
|
The position of the scheme can be summarised as follows: |
|||||||||||||||||||||||||||
|
2008 |
2007 |
||||||||||||||||||||||||||
|
£m |
£m |
||||||||||||||||||||||||||
|
Present value of the defined benefit obligation |
- |
(62.2) |
|||||||||||||||||||||||||
|
Assets at fair value |
- |
67.2 |
|||||||||||||||||||||||||
|
Retirement benefit surplus/(liability) |
|
- |
5.0 |
||||||||||||||||||||||||
|
Reconciliation of present value of defined benefit obligation for year to 31 December 2008 |
|||||||||||||||||||||||||||
|
2008 |
2007 |
||||||||||||||||||||||||||
|
£m |
£m |
||||||||||||||||||||||||||
|
Defined benefit obligation at start of year |
62.2 |
66.4 |
|||||||||||||||||||||||||
|
Interest cost |
1.6 |
3.4 |
|||||||||||||||||||||||||
|
Gain on change of assumptions |
- |
(4.6) |
|||||||||||||||||||||||||
|
Experience loss |
- |
0.5 |
|||||||||||||||||||||||||
|
Actual benefit payments |
- |
(3.5) |
|||||||||||||||||||||||||
|
Transferred to income statement on closure |
(63.8) |
- |
|||||||||||||||||||||||||
|
Defined benefit obligation at end of year |
|
- |
62.2 |
||||||||||||||||||||||||
|
2008 |
2007 |
|||||||||
|
£m |
£m |
|||||||||
|
Analysis of the amount charged to other finance income |
||||||||||
|
Expected return on scheme assets |
2.1 |
4.6 |
||||||||
|
Interest on scheme liabilities |
(1.6) |
(3.4) |
||||||||
|
Net return |
0.5 |
1.2 |
||||||||
|
Net credit for the period |
0.5 |
1.2 |
||||||||
|
Reconciliation of fair value of assets for the year to 31 December 2008 |
||||||||||||||||
|
2008 |
2007 |
|||||||||||||||
|
£m |
£m |
|||||||||||||||
|
Fair value of Scheme assets at start of year |
67.2 |
65.3 |
||||||||||||||
|
Expected return on Scheme assets |
2.1 |
4.6 |
||||||||||||||
|
Actuarial (loss)/gain on Scheme assets |
- |
(0.9) |
||||||||||||||
|
Company contributions |
1.7 |
1.7 |
||||||||||||||
|
Actual benefit payments |
- |
(3.5) |
||||||||||||||
|
Transferred to income statement on closure |
(71.0) |
- |
||||||||||||||
|
Fair value of Scheme assets at end of year |
- |
67.2 |
||||||||||||||
|
Return on assets for year to 31 December 2008 |
||||||||||||||||
|
2008 |
2007 |
|||||||||||||||
|
£m |
£m |
|||||||||||||||
|
Expected return on Scheme assets |
2.1 |
4.6 |
||||||||||||||
|
Actuarial (loss)/gain on Scheme assets |
- |
(0.9) |
||||||||||||||
|
Actual return on Scheme assets |
2.1 |
3.7 |
||||||||||||||
|
Net balance sheet position |
||||||||||||||||
|
Defined benefit obligation |
- |
(62.2) |
||||||||||||||
|
Fair value of assets |
- |
67.2 |
||||||||||||||
|
Funded status |
- |
5.0 |
||||||||||||||
|
2008 |
2007 |
|||||||||
|
£m |
£m |
|||||||||
|
Reconciliation of change in funded status for the year to 31 December 2008 |
||||||||||
|
Defined benefit liability at start of year |
5.0 |
(1.1) |
||||||||
|
Pension income |
0.5 |
1.2 |
||||||||
|
Company contributions |
1.7 |
1.7 |
||||||||
|
Gain recognised in SORIE |
- |
3.2 |
||||||||
|
Charged to income statement on closure |
(7.2) |
- |
||||||||
|
Defined benefit asset/(liability) |
- |
5.0 |
||||||||
|
4. |
Group operating loss |
|||||||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||||||||
|
Group operating loss is stated after charging: |
||||||||||||||||||||||
|
Depreciation of fixed assets |
245 |
260 |
||||||||||||||||||||
|
Auditors' remuneration |
- |
Fees payable to the Company's auditor for the audit |
||||||||||||||||||||
|
of the Group's annual accounts |
40 |
|
40 |
|||||||||||||||||||
|
- |
Fees payable to the Company's auditor for the audit |
|||||||||||||||||||||
|
of the subsidiary accounts |
|
108 |
103 |
|||||||||||||||||||
|
- |
Tax services |
|
183 |
221 |
||||||||||||||||||
|
- |
Audit of the pension scheme |
|
9 |
9 |
||||||||||||||||||
|
- |
Advice in respect of disposal of discontinuing operations |
448 |
- |
|||||||||||||||||||
|
- |
Other services |
1 |
4 |
|||||||||||||||||||
|
Total amount paid to auditors |
789 |
377 |
||||||||||||||||||||
|
Impairment charge on Raven Russia Limited shares |
10,811 |
- |
||||||||||||||||||||
|
Impairment charge on Oriel Securities Limited shares |
2,549 |
- |
||||||||||||||||||||
|
Operating lease rentals |
- |
Land and buildings, cars |
|
591 |
636 |
|||||||||||||||||
|
Share based payments charge |
|
1,695 |
671 |
|||||||||||||||||||
|
5. |
Finance income and expense |
|||||||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||||||||
|
Group |
||||||||||||||||||||||
|
Finance income |
||||||||||||||||||||||
|
Bank interest receivable |
593 |
951 |
||||||||||||||||||||
|
Return on amount charged to pension scheme |
2,103 |
4,592 |
||||||||||||||||||||
|
Dividends received on Raven Russia Limited shares |
888 |
541 |
||||||||||||||||||||
|
Dividends received on Oriel Securities Limited shares |
193 |
193 |
||||||||||||||||||||
|
3,777 |
6,277 |
|||||||||||||||||||||
|
Finance expense |
||||||||||||||||||||||
|
Bank interest payable |
(1,277) |
(270) |
||||||||||||||||||||
|
Interest on defined benefit pension plan obligation |
(1,560) |
(3,360) |
||||||||||||||||||||
|
(2,837) |
(3,630) |
|||||||||||||||||||||
|
6. |
Tax expense |
|||||||||||
|
2008 |
2007 |
|||||||||||
|
£'000 |
£'000 |
|||||||||||
|
(a) |
Tax recognised in the income statement comprises: |
|||||||||||
|
UK corporation tax charge at the rate of 28.5 per cent. (2007: 30 per cent.) |
||||||||||||
|
based on the taxable result for the year |
- |
- |
||||||||||
|
Over provision in respect of prior years |
(2) |
- |
||||||||||
|
(2) |
- |
|||||||||||
|
Overseas tax - Current |
46 |
82 |
||||||||||
|
Current tax expense |
44 |
82 |
||||||||||
|
Deferred tax expense (note 20) |
||||||||||||
|
Origination and reversal of temporary differences |
(4,309) |
(734) |
||||||||||
|
Written off on disposal of Raven Audley Court plc |
(1,982) |
- |
||||||||||
|
Recognition of deferred tax asset on trading losses |
- current year |
- |
(1,486) |
|||||||||
|
- prior year |
- |
(514) |
||||||||||
|
Deferred tax expense |
(6,291) |
(2,734) |
||||||||||
|
Total tax credit reported in the income statement |
(6,247) |
(2,652) |
||||||||||
|
Analysed between: |
||||||||||||
|
Tax on continuing activities |
(4,743) |
(2,329) |
||||||||||
|
Tax on discontinuing activities |
(1,504) |
(323) |
||||||||||
|
(6,247) |
(2,652) |
|||||||||||
|
(b) |
The tax charge for the period is lower than the standard |
|||||||||||
|
rate of corporation tax in the UK (28.5 per cent.) due to: |
||||||||||||
|
Continuing and discontinued: |
||||||||||||
|
Loss before tax |
(14,036) |
(4,816) |
||||||||||
|
Expected tax credit at 28.5 per cent. |
(4,000) |
(1,445) |
||||||||||
|
Profit on disposal of Russian Property fund management business not taxable |
(11,217) |
- |
||||||||||
|
Pension disposal cost payable in 2009 for which no deferred tax asset created |
(1,300) |
- |
||||||||||
|
Losses for which no deferred tax asset recognised |
9,208 |
- |
||||||||||
|
Dividends not taxable |
(54) |
(220) |
||||||||||
|
Items not deductible for tax purposes |
1,478 |
51 |
||||||||||
|
Pension scheme income return not taxable |
(152) |
(369) |
||||||||||
|
Utilisation of prior year tax losses |
(210) |
(669) |
||||||||||
|
Total tax credit reported in the income statement |
(6,247) |
(2,652) |
||||||||||
|
(c) |
Reconciliation of movement of deferred tax net liabilities |
|||||||||
|
2008 |
2008 |
2007 |
2007 |
|||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
|||||||
|
Details of the deferred tax asset amounts charged |
||||||||||
|
to the income statement and amounts charged to |
||||||||||
|
reserves are as follows: |
||||||||||
|
Net deferred tax liability at 1 January |
(3,940) |
(6,948) |
||||||||
|
Other temporary differences |
(381) |
239 |
||||||||
|
Recognition of trading losses |
(1,494) |
2,000 |
||||||||
|
Deferred consideration on fair value uplift of inventories |
4,776 |
1,404 |
||||||||
|
Pension scheme |
1,408 |
(813) |
||||||||
|
Amounts credited/(charged) to income statement |
|
4,309 |
2,830 |
|||||||
|
Amounts (charged)/credited to equity |
||||||||||
|
Pension scheme actuarial gain |
- |
(927) |
||||||||
|
Available for sale investments |
(369) |
1,105 |
||||||||
|
(369) |
178 |
|||||||||
|
Net deferred tax liabilities |
- |
(3,940) |
||||||||
|
Deferred tax assets (note 20) |
583 |
2,827 |
||||||||
|
Deferred tax liabilities (note 20) |
(583) |
(6,767) |
||||||||
|
Net deferred tax liabilities |
- |
(3,940) |
||||||||
|
7. |
Discontinued operations |
|||||||||
|
In the year the Group disposed of its Independent Living and Russian Property Fund Management businesses. The profit/(loss) arising on disposal and their results prior to disposal can be summarised as below: |
||||||||||
|
Property |
||||||||||
|
Independent |
Fund |
|||||||||
|
Living |
Management |
Total |
||||||||
|
£'000 |
£'000 |
£'000 |
||||||||
|
Profit/(loss) on disposal |
(3,488) |
34,055 |
30,567 |
|||||||
|
Results to disposal |
(3,467) |
12,035 |
8,568 |
|||||||
|
(6,955) |
46,090 |
39,135 |
||||||||
|
In October 2008 the Group sold its 75 per cent interest in its Independent Living business Audley for a total consideration of £15 million details of which are provided below. |
||||||||||
|
£'000 |
£'000 |
|||||||||
|
Consideration received |
||||||||||
|
Cash |
15,000 |
|||||||||
|
Net assets disposed of |
||||||||||
|
Property plan and equipment |
(4,419) |
|||||||||
|
Inventories |
(56,576) |
|||||||||
|
Trade and other receivables |
(3,627) |
|||||||||
|
Bank loans and overdrafts |
44,017 |
|||||||||
|
Trade and other payables |
876 |
(19,729) |
||||||||
|
Costs of disposal |
(309) |
|||||||||
|
Pre tax loss on disposal of discontinued operation |
(5,038) |
|||||||||
|
Related tax credit |
1,550 |
|||||||||
|
Loss on disposal of discontinued operation |
(3,488) |
|||||||||
|
The net cash inflow comprises: |
||||||||||
|
Cash received |
15,000 |
|||||||||
|
Costs of disposal |
(309) |
|||||||||
|
14,691 |
||||||||||
|
2008 |
2007 |
|||||||||
|
£'000 |
£'000 |
|||||||||
|
Result of discontinued operation |
||||||||||
|
Revenue |
2,395 |
541 |
||||||||
|
Expense other than finance cost |
(4,317) |
(4,239) |
||||||||
|
Finance costs |
(1,545) |
(811) |
||||||||
|
Loss before tax |
(3,467) |
(4,509) |
||||||||
|
Tax income |
- |
405 |
||||||||
|
Loss from selling discontinued operation |
(3,488) |
- |
||||||||
|
Loss for the period |
(6,955) |
(4,104) |
||||||||
|
On 9 July 2008 Raven Mount plc announced the proposed disposal of its Russian Property Fund Management business to Raven Russia Limited and entered into a Framework Agreement which governed the restructuring of Raven Mount plc and provided for the effective disposal for a total consideration of £15.0 million in cash and 80 million new Raven Russia Limited shares, the sale was completed in November 2008. The restructuring provided for in the Framework Agreement was designed so that 64 million of the 80 million Raven Russia Limited shares forming part of the consideration for the disposal were received directly by Raven Mount Limited Shareholders and the £15.0 million cash consideration and the remaining 16 million of the Raven Russia Limited shares forming the balance of the consideration for the disposal were received by Raven Mount Limited. |
||||||||||
|
£'000 |
£'000 |
|||||||||
|
Consideration received |
||||||||||
|
Cash |
15,269 |
|||||||||
|
Shares (80 million Raven Russia Limited Ordinary shares valued at |
||||||||||
|
26.75 pence on the date of completion) |
21,400 |
|||||||||
|
36,669 |
||||||||||
|
Net assets disposed of |
||||||||||
|
Property, plant and equipment |
(553) |
|||||||||
|
Trade and other receivables |
(495) |
|||||||||
|
Cash |
(156) |
|||||||||
|
Trade and other payables |
201 |
(1,003) |
||||||||
|
Costs of disposal |
(1,611) |
|||||||||
|
Pre tax gain on disposal of discontinued operation |
34,055 |
|||||||||
|
Related tax expense |
- |
|||||||||
|
Profit on disposal of discontinued operation |
34,055 |
|||||||||
|
The net cashflow inflow comprises: |
||||||||||
|
Cash received |
15,269 |
|||||||||
|
Cash disposed of |
(156) |
|||||||||
|
Costs of disposal |
(1,611) |
|||||||||
|
13,502 |
||||||||||
|
Results of discontinued operation |
||||||||||||||||
|
2008 |
2007 |
|||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||
|
Revenue |
15,628 |
8,517 |
||||||||||||||
|
Expense other than finance cost |
(3,680) |
(5,574) |
||||||||||||||
|
Finance income |
133 |
94 |
||||||||||||||
|
Profit before tax |
12,081 |
3,037 |
||||||||||||||
|
Tax expense |
(46) |
(82) |
||||||||||||||
|
Profit from selling discontinued operation |
34,055 |
- |
||||||||||||||
|
Profit for the period |
46,090 |
2,955 |
||||||||||||||
|
8. |
Dividends |
|||||||||||||||
|
2008 |
2007 |
|||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||
|
On Ordinary shares of Raven Mount plc |
||||||||||||||||
|
- Final paid for 2007 1.4p per share (2006: 1.0p) |
1,565 |
1,106 |
||||||||||||||
|
- Interim paid for 2008 nil per share (2007: 0.8p) |
- |
885 |
||||||||||||||
|
Distribution of Raven Russia Limited Shares (64 million at 26.75 pence) |
17,120 |
- |
||||||||||||||
|
18,685 |
1,991 |
|||||||||||||||
|
Proposed for approval at AGM |
||||||||||||||||
|
Final dividend for 2008 nil pence (2007: 1.4 pence) |
- |
1,568 |
||||||||||||||
|
9. |
Loss and shareholders' funds per Ordinary share |
|||||||||||||||
|
The basic loss per Ordinary share is calculated in accordance with IAS 33 on the loss for the year (before dividends on Ordinary shares) of £7,789,000 (2007: loss £2,164,000) and 112.1 million shares (2007: 110.1 million), being the weighted average number of Ordinary shares in issue excluding those owned by the Employee Share Trust and those held as Treasury shares. Since none of the Company's potential Ordinary shares are dilutive, there is no difference between the basic and diluted loss per share. |
||||||||||||||||
|
Shareholders' funds per Ordinary share are 52.9 pence (2007: 73.2 pence). The calculation is based on shareholders' funds as at the year end of £57.5 million (2007: £82.0 million) divided by the number of shares in issue (less those held as Treasury shares) at the year end amounting to 108.7 million (2007: 112.0 million). The Directors consider that as a property development group with a significant level of inventory held at fair value at acquisition (plus subsequent costs), along with available for sale assets held at fair value and a substantial cash balance, shareholders funds per share is a meaningful performance indicator. |
||||||||||||||||
|
10. |
Property, plant and equipment |
|||||||||||||||
|
Freehold |
Plant |
|||||||||||||||
|
land and |
and |
|||||||||||||||
|
buildings |
equipment |
Total |
||||||||||||||
|
£,000 |
£'000 |
£'000 |
||||||||||||||
|
Group |
||||||||||||||||
|
Cost |
||||||||||||||||
|
At 1 January 2008 |
4,265 |
2,333 |
6,598 |
|||||||||||||
|
Additions |
- |
267 |
267 |
|||||||||||||
|
Disposals following sale of Raven Audley Court plc |
(4,265) |
(242) |
(4,507) |
|||||||||||||
|
Disposals following sale of Russian Property Fund management business |
- |
(741) |
(741) |
|||||||||||||
|
Other disposals |
- |
(330) |
(330) |
|||||||||||||
|
At 31 December 2008 |
- |
1,287 |
1,287 |
|||||||||||||
|
Depreciation |
||||||||||||||||
|
At 1 January 2008 |
36 |
1,367 |
1,403 |
|||||||||||||
|
Charge for the year |
- |
245 |
245 |
|||||||||||||
|
Disposals following sale of Raven Audley Court plc |
(36) |
(61) |
(97) |
|||||||||||||
|
Disposals following sale of Russian Property Fund management business |
- |
(131) |
(131) |
|||||||||||||
|
Other disposals |
- |
(200) |
(200) |
|||||||||||||
|
At 31 December 2008 |
- |
1,220 |
1,220 |
|||||||||||||
|
Net book value |
||||||||||||||||
|
At 31 December 2008 |
- |
67 |
67 |
|||||||||||||
|
At 31 December 2007 |
4,229 |
966 |
5,195 |
|||||||||||||
|
Group |
||||||||||||||||
|
Cost |
||||||||||||||||
|
At 1 January 2007 |
- |
1,514 |
1,514 |
|||||||||||||
|
Additions |
4,265 |
901 |
5,166 |
|||||||||||||
|
Disposals |
- |
(82) |
(82) |
|||||||||||||
|
At 31 December 2007 |
4,265 |
2,333 |
6,598 |
|||||||||||||
|
Depreciation |
||||||||||||||||
|
At 1 January 2007 |
- |
1,151 |
1,151 |
|||||||||||||
|
Charge for the year |
36 |
224 |
260 |
|||||||||||||
|
Disposals |
- |
(8) |
(8) |
|||||||||||||
|
At 31 December 2007 |
36 |
1,367 |
1,403 |
|||||||||||||
|
Net book value |
||||||||||||||||
|
At 31 December 2007 |
4,229 |
966 |
5,195 |
|||||||||||||
|
At 31 December 2006 |
- |
363 |
363 |
|||||||||||||
|
11. |
Investments in jointly controlled entities |
||||||||||||||
|
2008 |
2007 |
||||||||||||||
|
£'000 |
£'000 |
||||||||||||||
|
(a) |
Group |
||||||||||||||
|
Cost |
|||||||||||||||
|
At 1 January 2008 |
- |
- |
|||||||||||||
|
Reclassification of fair value uplift on jointly controlled entities inventories from |
|||||||||||||||
|
Group inventories |
1,646 |
- |
|||||||||||||
|
At 1 January and 31 December 2008 |
1,646 |
- |
|||||||||||||
|
Share of retained profits |
|||||||||||||||
|
At 1 January |
42 |
34 |
|||||||||||||
|
Profit/(loss) for the year |
1,172 |
(324) |
|||||||||||||
|
(Released)/Off-set against amounts due from jointly controlled entity |
(332) |
332 |
|||||||||||||
|
At 31 December |
882 |
42 |
|||||||||||||
|
Net book value |
|||||||||||||||
|
At 31 December |
2,528 |
42 |
|||||||||||||
|
There are no recognised gains or losses in the trading joint ventures apart from the profit for the year. |
|||||||||||||||
|
(b) |
Investments in trading joint ventures |
||||||||||||||
|
The Group's investment in trading joint ventures relates to: |
|||||||||||||||
|
i) |
Coln Park LLP, a limited liability partnership operating in Great Britain. Coln Park is the 50% joint venture established to develop second homes in Gloucestershire. |
||||||||||||||
|
ii) |
Wellington Square Development Company Limited ("WSDC"), a company incorporated and operating in Great Britain. The total issued Ordinary share capital of this company is £100 of which 50 per cent. is owned by a subsidiary. WSDC is the joint venture company established to develop the retail town centre scheme in Stockton-on-Tees. The scheme was sold during 2004, however the company is still in existence. |
||||||||||||||
|
The Group's share of the assets and liabilities of its trading joint ventures was as follows: |
|||||||||||||||
|
2008 |
2008 |
2007 |
2007 |
||||||||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
||||||||||||
|
Share of assets |
|||||||||||||||
|
Current assets: |
|
||||||||||||||
|
Inventories |
9,201 |
5,049 |
|
||||||||||||
|
Receivables |
720 |
184 |
|||||||||||||
|
Cash and cash equivalents |
- |
231 |
|||||||||||||
|
9,921 |
5,464 |
||||||||||||||
|
Share of liabilities |
|||||||||||||||
|
Current liabilities |
(3,897) |
(5,422) |
|||||||||||||
|
Bank loan |
(3,496) |
(7,393) |
- |
(5,422) |
|||||||||||
|
2,528 |
42 |
||||||||||||||
|
The balances with joint ventures are shown in note 13. |
|||||||||||||||
|
12. |
Inventories |
|||||||||||
|
2008 |
2007 |
|
||||||||||
|
£'000 |
£'000 |
|||||||||||
|
Land held for development |
3,357 |
10,409 |
||||||||||
|
Construction work in progress |
31,405 |
73,177 |
||||||||||
|
34,762 |
83,586 |
|||||||||||
|
As at 31 December 2008 borrowings of £nil (2007: £17,968,000) were secured against inventories. |
||||||||||||
|
13. |
Trade and other receivables |
||||||||||||
|
2008 |
2007 |
|
|||||||||||
|
£'000 |
£'000 |
||||||||||||
|
Amounts falling due within one year |
|||||||||||||
|
Trade receivables |
371 |
1,511 |
|||||||||||
|
Loan to jointly controlled entity |
3,171 |
4,724 |
|||||||||||
|
Loan to jointly controlled entity partner |
1,827 |
5,892 |
|||||||||||
|
VAT |
261 |
2,197 |
|||||||||||
|
Other receivables |
1,450 |
3,006 |
|||||||||||
|
Prepayments and accrued income |
383 |
3,847 |
|||||||||||
|
Total |
7,463 |
21,177 |
|||||||||||
|
Loans to the jointly controlled entity and to the jointly controlled entity partner are repayable on demand. |
|||||||||||||
|
All remaining trade and other receivables are non-interest bearing. |
|||||||||||||
|
The Directors consider that the carrying amount of these assets approximate their fair value. |
|||||||||||||
|
Further disclosures relating to financial instruments are set out in note 18. |
|||||||||||||
|
14. |
Available for sale investments |
|||||||||
|
2008 |
2007 |
|
||||||||
|
£'000 |
£'000 |
|||||||||
|
Listed shares - Traded on AIM |
6,896 |
11,165 |
||||||||
|
Warrants in Raven Russia Limited |
1 |
452 |
||||||||
|
Other investment |
2,169 |
4,718 |
||||||||
|
9,066 |
16,335 |
|||||||||
|
Listed shares comprise amounts invested in Raven Russia Limited. The market value of the listed shares at 31 December 2008 was £6.9 million (2007: £11.2 million). In addition, the Group also holds warrants to subscribe for 7,650,000 Ordinary shares in Raven Russia Limited at £1. The warrants are exercisable at any time during the five year period commencing 29 July 2005, the date of Raven Russia Limited's admission to AIM. The warrants were valued using a Black-Scholes valuation model. The other investment represents shares in Oriel Securities Limited, an unlisted independent UK stockbroking and advisory business. Fair value is assessed using earnings multiples, calculated with reference to comparable entities. |
||||||||||
|
15. |
Cash and cash equivalents |
|||||||||||||||||
|
The cash balance of £37.5 million comprises the £15.0 million drawdown of the Royal Bank of Scotland facility, £22.0 million on short term deposits (held with five banks with not more than £5.0 million with any one bank), and a further £0.5 million of cash held in current accounts. |
||||||||||||||||||
|
16. |
Trade and other payables |
|||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||||
|
Deferred income |
- |
62 |
||||||||||||||||
|
Trade payables |
2,384 |
5,780 |
||||||||||||||||
|
Social security and other taxation |
85 |
295 |
||||||||||||||||
|
Accruals |
15,322 |
5,814 |
||||||||||||||||
|
17,791 |
11,951 |
|||||||||||||||||
|
Within the accruals balance is £4.6 million for the pension fund settlement (note 3) which was paid on 5 January 2009, and the £8.1 million bonus provision (note 2). The Directors consider that the carrying value of the trade and other payables included in current liabilities approximate to fair value as a result of the short maturity period of the amounts held at the year end. |
||||||||||||||||||
|
Further disclosures relating to financial instruments are set out in note 18. |
||||||||||||||||||
|
17. |
Bank loans and overdrafts |
|||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||||
|
Current liabilities |
||||||||||||||||||
|
Overdrafts |
15,134 |
18,330 |
||||||||||||||||
|
In August 2008, Raven Mount Limited renegotiated its Group facilities obtaining a secured £20.0 million facility available for one year until 31 August 2009. Following the receipt of the £15.0 million in cash on completion of the Russia disposal (note 7), the Group facility was restricted to £10.0 million with a further £10.0 million only available with bank consent. At the year end the Group had drawndown £15.0 million. The Group repaid the loan facility in January and cancelled the loan facility in February 2009. |
||||||||||||||||||
|
18. |
Financial instruments |
|
|
(a) |
In the year the Group was exposed through its operations to the following financial risks: Credit risk Fair value or cash flow interest rate risk Other market price risk Liquidity risk Foreign exchange risk Following the disposal of the Group's Russian and Assisted Living operations during the year (note 7), the Group has significantly reduced its exposure to liquidity and foreign exchange risks. Liquidity risk has been reduced due to the cash proceeds received amounting to £28.2 million (net of disposal costs) and foreign exchange risk has been virtually eliminated due to the Group's operations in Russia coming to an end. In the coming year the Group is exposed to the following financial risks: Credit risk Fair value or cash flow interest rate risk Other market price risk This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements, notably notes 13, 14, 15, 16 and 17. The Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks, have decreased from previous periods as the Group has substantially reduced debt and increased cash. Credit risk Credit risk is the risk of financial loss when counterparties are not able to meet their obligations. The Group has minimal exposure to credit risk from trade receivables on the residential side of the business given the nature and legal framework of the UK housing industry. In the vast majority of cases the full cash receipt for each sale occurs on legal completion, which is also the point of revenue recognition under the Group's accounting polices. Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum credit rating 'A' are accepted. Credit risk also arises from receivables. The Group reviews the credit-worthiness of those entities it contracts with. Principal receivables are loans to jointly controlled entities and jointly controlled partners, secured on developments which have been independently valued at amounts significantly greater than the loans. Market risk Market risk arises from the Group's use of interest bearing, tradeable and foreign currency financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (other price risk). It also includes the effect of the level of UK house prices which in turn is affected by factors such as employment levels, interest rates, the supply of suitable land and consumer confidence. Other market price risk The Group's balance sheet is exposed to market price risk as the Group holds some equity investments in other companies (see note 14). The Directors believe that the exposure to market price risk from these activities is acceptable in the Group's circumstances. |
|
|
Liquidity risk Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Board receives and monitors rolling 12 month cash flow projections on a monthly basis as well as information regarding cash balances. The Board sets limits for the amounts of cash that can be held with each individual bank. As at 31 December 2008 the Group has £37.5 million as a cash balance compared with £4.4 million at 31 December 2007, accordingly the risk of loss has increased and is the reason for introducing a policy of only depositing a maximum of £5 million with any one bank. Interest rate risk The Group's loans are all at floating rates of interest. The Group's loans during the year were in respect of Raven Audley Court property developments and covered the expected period of development. However, as a result of the disposal of this business segment the Group are no longer liable to this obligation. During the period these loans were in the Group if interest rates fluctuate, so will the profits from those developments. The Group also has committed Group facilities which are renewed on an annual basis, when interest rate risk is considered. During 2008 and 2007, the Group's borrowings at variable rate were denominated in Sterling. Interest rate risk has also decreased as the loan facility was completely repaid in January 2009 and the facility was cancelled by the Group in February 2009. Foreign exchange risk The Group's principal exchange risk is in respect of its property fund management income, which is receivable in Sterling but calculated as a percentage of gross assets which are denominated in US dollars. Following the disposal of the Property Fund management business, the Group no longer have exposure to this risk. Principal financial instruments The principal financial instruments used the by the Group, from which financial instrument risk arises, are as follows: Trade and other receivables Cash at bank Bank overdrafts Investments in quoted and unquoted equity securities Trade and other payables Floating-rate bank loans The classification of those principle financial instruments in accordance with IAS 39 is shown below along with the net financial asset position of Group at 31 December 2008 and the income and expenditure recognised in relation to each category of instrument. |
||
|
The Group's financial instruments at 31 December 2008 were as follows: |
|||||||||||||||
|
Income/ |
|||||||||||||||
|
(expense) |
|||||||||||||||
|
Gain |
recognised |
||||||||||||||
|
As at 31 December 2008 |
Carrying |
Fair |
recognised |
in the income |
|||||||||||
|
value |
value |
in equity |
statement |
||||||||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
||||||||||||
|
Financial asset |
|||||||||||||||
|
Loans and receivables |
|||||||||||||||
|
Non-derivative assets |
6,819 |
6,819 |
|
|
|||||||||||
|
Interest receivable on loan to JCE |
- |
218 |
|||||||||||||
|
Available for sale investments |
9,066 |
9,066 |
|
|
|||||||||||
|
Recycled from equity and recognised in the income statement |
1,313 |
(1,313) |
|||||||||||||
|
Recognised directly in income statement |
- |
(12,047) |
|||||||||||||
|
Cash and cash equivalents |
37,538 |
37,538 |
|
||||||||||||
|
Interest received |
- |
726 |
|||||||||||||
|
Other financial liabilities |
(17,518) |
(17,518) |
|
||||||||||||
|
Interest payable on loans and overdrafts |
- |
(2,822) |
|||||||||||||
|
35,905 |
35,905 |
1,313 |
(15,238) |
||||||||||||
|
The Group's financial instruments at 31 December 2007 were as follows: |
|||||||||||||||
|
Income/ |
|||||||||||||||
|
(expense) |
|||||||||||||||
|
Loss |
recognised |
||||||||||||||
|
As at 31 December 2007 |
Carrying |
Fair |
recognised |
in the income |
|||||||||||
|
value |
value |
in equity |
statement |
||||||||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
||||||||||||
|
Financial asset |
|||||||||||||||
|
Loans and receivables |
|||||||||||||||
|
Non-derivative assets |
15,133 |
15,133 |
|
||||||||||||
|
Interest receivable on loan to JCE |
- |
448 |
|||||||||||||
|
Available for sale investments |
16,335 |
16,335 |
|
|
|||||||||||
|
Recycled from equity and recognised in the income statement |
(3,769) |
- |
|||||||||||||
|
Cash and cash equivalents |
4,392 |
4,392 |
|
||||||||||||
|
Interest received |
- |
1,049 |
|||||||||||||
|
Other financial liabilities |
(42,078) |
(42,078) |
|||||||||||||
|
Interest payable on loans and overdrafts |
|
|
- |
(1,085) |
|||||||||||
|
(6,218) |
(6,218) |
(3,769) |
412 |
||||||||||||
|
The following table details the contractual maturity analysis of the Group's financial liabilities. |
||||||||||
|
|
Bank loan |
|||||||||
|
Trade |
and |
|||||||||
|
payables |
overdrafts |
Total |
||||||||
|
31 December |
31 December |
31 December |
||||||||
|
2008 |
2008 |
2008 |
||||||||
|
£'000 |
£'000 |
£'000 |
||||||||
|
On demand |
- |
15,134 |
15,134 |
|||||||
|
Within one month |
2,384 |
- |
2,384 |
|||||||
|
More than one year |
- |
- |
- |
|||||||
|
2,384 |
15,134 |
17,518 |
||||||||
|
|
Bank loan |
|||||||||
|
Trade |
and |
|||||||||
|
payables |
overdrafts |
Total |
||||||||
|
31 December |
31 December |
31 December |
||||||||
|
2007 |
2007 |
2007 |
||||||||
|
£'000 |
£'000 |
£'000 |
||||||||
|
On demand |
- |
18,330 |
18,330 |
|||||||
|
Within one month |
5,780 |
- |
5,780 |
|||||||
|
More than one year |
- |
17,968 |
17,968 |
|||||||
|
5,780 |
36,298 |
42,078 |
||||||||
|
The Group did not use any financial derivatives during the year. |
||||||||||
|
(b) |
Borrowing facilities |
||||||||||
|
2008 |
2007 |
||||||||||
|
£'000 |
£'000 |
||||||||||
|
The Group has borrowing facilities as follows: |
|||||||||||
|
Available overdraft facilities |
20,000 |
40,000 |
|||||||||
|
Bank loans |
- |
17,968 |
|
||||||||
|
20,000 |
57,968 |
||||||||||
|
Amounts drawn |
- Overdraft facilities |
(15,000) |
(18,330) |
||||||||
|
- Bank loans |
- |
(17,968) |
|||||||||
|
Amounts undrawn |
5,000 |
21,670 |
|||||||||
|
Cash at bank |
37,538 |
4,392 |
|||||||||
|
Total cash and facilities available to the Group |
42,538 |
26,062 |
` |
||||||||
|
At the year end the Group had a £20 million facility until 30 August 2009, £10.0 million is immediately available and a further £10.0 million with the bank's consent. The bank loan facilities are secured over inventories included in the financial statements at £24.1 million. The Group cancelled the loan facility agreement in February 2009. |
|||||||||||
|
19. |
Short-term provisions |
|||||||||||||||||||||
|
|
||||||||||||||||||||||
|
|
Provisions for |
|||||||||||||||||||||
|
Maintenance |
||||||||||||||||||||||
|
£'000 |
||||||||||||||||||||||
|
Group |
||||||||||||||||||||||
|
At 1 January 2008 |
1,593 |
|
||||||||||||||||||||
|
Charged to profit and loss account |
86 |
|||||||||||||||||||||
|
Utilised and released in the year |
(631) |
|||||||||||||||||||||
|
At 31 December 2008 |
1,048 |
|||||||||||||||||||||
|
This housing maintenance provision arises principally from warranties and other liabilities on housing sold. Whilst such warranties extend to a period of ten years, payment of these costs are likely to occur within a period of two years. The provision made is the Directors' best estimate of the Group's liability. |
||||||||||||||||||||||
|
20. |
Deferred tax asset and liabilities |
|||||||||||||||||||||
|
2008 |
2007 |
|||||||||||||||||||||
|
£'000 |
£'000 |
|||||||||||||||||||||
|
The Group's deferred tax asset and liability can be explained as follows: |
||||||||||||||||||||||
|
Deferred tax asset relating to: |
||||||||||||||||||||||
|
Trading losses |
506 |
2,000 |
||||||||||||||||||||
|
Mark to market of available for sale investments |
- |
368 |
||||||||||||||||||||
|
Other temporary differences |
77 |
459 |
||||||||||||||||||||
|
583 |
2,827 |
|||||||||||||||||||||
|
Deferred tax liability relating to: |
||||||||||||||||||||||
|
Fair value uplift on inventories |
583 |
5,359 |
||||||||||||||||||||
|
Retirement benefit surplus |
- |
1,408 |
||||||||||||||||||||
|
583 |
6,767 |
|||||||||||||||||||||
|
The Group has an additional £11.0 million (calculated at the Group's standard rate of UK Corporation Tax of 28 per cent.) of tax losses for which no deferred tax asset has been created, due to the uncertainty of future profits. |
||||||||||||||||||||||
|
21. |
Called up share capital |
||||||||||||||||||||||||||||||
|
2008 |
2008 |
2007 |
2007 |
||||||||||||||||||||||||||||
|
No '000 |
£'000 |
No '000 |
£'000 |
||||||||||||||||||||||||||||
|
Authorised |
|||||||||||||||||||||||||||||||
|
Ordinary shares of 0.1 pence |
244,000 |
244 |
244,000 |
244 |
|||||||||||||||||||||||||||
|
£1 Convertible Ordinary shares |
- |
- |
6 |
6 |
|||||||||||||||||||||||||||
|
244 |
250 |
||||||||||||||||||||||||||||||
|
Allotted, called up and fully paid |
|||||||||||||||||||||||||||||||
|
Ordinary shares of 0.1 pence |
114,399 |
114 |
112,021 |
112 |
|||||||||||||||||||||||||||
|
£1 Convertible Ordinary shares |
- |
- |
6 |
6 |
|||||||||||||||||||||||||||
|
114 |
118 |
||||||||||||||||||||||||||||||
|
The movements in issued Ordinary share capital during the period were as follows: |
|||||||||||||||||||||||||||||||
|
Ordinary shares |
|||||||||||||||||||||||||||||||
|
of 0.1pence each |
|||||||||||||||||||||||||||||||
|
No. '000 |
£'000 |
||||||||||||||||||||||||||||||
|
Issued on incorporation |
2 |
- |
|||||||||||||||||||||||||||||
|
Issued re acquisition of Raven Mount Limited (after issue of 2,376,000 shares) |
|||||||||||||||||||||||||||||||
|
from conversion of Convertible Ordinary shares |
114,397 |
114 |
|||||||||||||||||||||||||||||
|
At 31 December 2008 |
114,399 |
114 |
|||||||||||||||||||||||||||||
|
As at 31 December 2008 5,728,729 Ordinary shares, all of which were bought in the year, were held in Treasury. |
|||||||||||||||||||||||||||||||
|
22. |
Share schemes |
||||||||||||||||||||||||||||||
|
Share Options |
|||||||||||||||||||||||||||||||
|
The Company has adopted an Unapproved share option plan and an Approved Company share option plan which provide for the issue of options over Ordinary shares in the Company. The total number of Ordinary shares over which Option Shares may be granted is limited to 10 per cent. of the total number of issued Ordinary shares of the Company at any time. The total number of shares under option is 5,590,000 representing 5.1 per cent of the issued share capital at the year end. |
|||||||||||||||||||||||||||||||
|
Unapproved share option plan (Unapproved Plan) |
|||||||||||||||||||||||||||||||
|
Option Shares under the Unapproved Plan are exercisable in 3 equal parts. For each part, exercise will be on or after the third, fourth and fifth anniversaries of the Date of Grant at the earliest and the Performance Condition shall first be tested for each one third part on these anniversaries. Unexercised options may be reviewed against the Performance Condition in subsequent periods broadly every 6 months, but always from the Date of Grant. Options lapse if not exercised within 7 years and 3 months from the Date of Grant. The Performance Condition states that the share price increase must exceed the RPI plus 3 per cent. per annum and exceed the increase in the FTSE Small Cap Index for the relevant period. Since the grant of these options, the share price has decreased by 82.5 per cent, RPI increased by 10.4 per cent and the FTSE small cap decreased by 42.5 per cent. Option Shares were issued under the Unapproved Plan on 8 December 2005 over 6,665,000 Ordinary shares in the Company at an exercise price of 80.0 pence, being the average share price for the month of November 2005. As at 31 December 2008 360,000 options have lapsed, 715,000 options were cancelled and 5,590,000 options were surrendered and replaced with new options at a rebased exercise price of 30p on 14 October 2008 following the disposal of the Russian Property Fund Management business. Further option shares were issued under the Unapproved Plan on the 21 March 2007 over 1,005,000 Ordinary shares at an exercise price of 155.1 pence, being the average share price for the 5 trading days prior to issue. All of these share options were cancelled on 14 October 2008. All options lapse if they have not been exercised within seven years and three months from the date of grant of the options. |
|||||||||||||||||||||||||||||||
|
Approved Company share option plan (CSOP) |
|||||||||||||||||||||||||||||||||
|
Employees and full-time Directors of the Group have been offered Option shares subject to a maximum value at any one time per employee of £30,000 (being the Inland Revenue limit for CSOPs). Option Shares cannot be exercised until 3 years after grant and are subject to a performance condition that the share price increase must exceed the RPI plus 3 per cent. per annum. This is first measured on the third anniversary of the date of grant, thereafter half yearly based on the prior December or June. The options lapse if they are not exercised within seven years and three months from the date of grant of the option. 1,223,809 option shares were issued under the CSOP on 28 April 2006 and a further 221,111 Option shares were issued on 21 March 2007. As at 31 December 2008 507,400 options have lapsed and the remaining 937,520 Option shares in the Company were surrendered unexercised on 14 October 2008. |
|||||||||||||||||||||||||||||||||
|
2008 |
2008 |
2007 |
2007 |
||||||||||||||||||||||||||||||
|
Weighted |
Weighted |
||||||||||||||||||||||||||||||||
|
average |
average |
||||||||||||||||||||||||||||||||
|
exercise |
exercise |
||||||||||||||||||||||||||||||||
|
price |
price |
||||||||||||||||||||||||||||||||
|
(pence) |
Number |
(pence) |
Number |
||||||||||||||||||||||||||||||
|
Outstanding at the beginning of the year |
92.9 |
8,477,797 |
83.6 |
7,774,522 |
|||||||||||||||||||||||||||||
|
Cancelled during the year |
120.0 |
(2,657,520) |
- |
- |
|||||||||||||||||||||||||||||
|
Granted during the year |
- |
- |
148.3 |
1,226,111 |
|||||||||||||||||||||||||||||
|
Exercised during the year |
- |
- |
- |
- |
|||||||||||||||||||||||||||||
|
Lapsed during the year |
96.0 |
(230,277) |
97.9 |
(522,836) |
|||||||||||||||||||||||||||||
|
Outstanding at the end of the year |
30.00 |
5,590,000 |
92.9 |
8,477,797 |
|||||||||||||||||||||||||||||
|
All share options lapsed during the year, with the exception of 5,590,000 of the options that were issued in November 2005, which have had their exercise price modified from 80 pence per share to 30 pence per share. |
|||||||||||||||||||||||||||||||||
|
As at both 31 December 2008 and 31 December 2007 none of the share options were exercisable as the performance conditions had not been satisfied. |
|||||||||||||||||||||||||||||||||
|
The Group uses a calculated Beta to factor in market vesting conditions. |
|||||||||||||||||||||||||||||||||
|
The following information is relevant in the determination of the fair value of options granted during 2007 no options were granted during 2008 under the equity settled share based remuneration schemes operated by Raven Mount Group plc. |
|||||||||||||||||||||||||||||||||
|
2007 |
|||||||||||||||||||||||||||||||||
|
Option pricing model used |
Black-Scholes |
||||||||||||||||||||||||||||||||
|
Weighted average share price at grant date (pence) |
148.34 |
||||||||||||||||||||||||||||||||
|
Weighted average exercise price (pence) |
148.34 |
||||||||||||||||||||||||||||||||
|
Weighted average contractual life (days) |
1,123 |
||||||||||||||||||||||||||||||||
|
Equity volatility |
60% |
||||||||||||||||||||||||||||||||
|
Expected dividend growth rate |
1.69% |
||||||||||||||||||||||||||||||||
|
Risk-free interest rate |
4.5% |
||||||||||||||||||||||||||||||||
|
The volatility was calculated in accordance with the Group's calculated Beta based on a statistical analysis of the Company's share price. |
|||||||||||||||||||||||||||||||||
|
2008 |
2007 |
||||||||||||||||||||||||||||||||
|
£'000 |
£'000 |
||||||||||||||||||||||||||||||||
|
The share-based remuneration expense comprises: |
|||||||||||||||||||||||||||||||||
|
Equity-settled schemes |
1,695 |
671 |
|||||||||||||||||||||||||||||||
|
The increased charge for the equity settled schemes represents the one-off charge to the income statement following the lapse and surrender of options in relation to the reorganisation of the Group following the disposal of the Russian Property Fund Management business in November 2008. None of the options were actually exercised and the increase in the charge had no affect on net assets. |
||||||||||
|
The volatility was calculated in accordance with the Group's calculated Beta based on a statistical analysis of the Company's share price. |
||||||||||
|
The exercise price of options outstanding at the end of the year was 30p (2007: 80p and 155.1) and their weighted average contractual life was 0.96 years (2007: 2.09 years). Of the total number of options outstanding at the end of the year, nil (2007: nil) had vested and were exercisable at the end of the year. The expected life of the options is based on historical data. |
||||||||||
|
23a. |
Reserves |
||||||||||||||
|
Treasury |
|||||||||||||||
|
share |
|||||||||||||||
|
reserve |
|||||||||||||||
|
|
and |
Available |
|||||||||||||
|
|
Share |
Capital |
reserve |
Reverse |
for sale |
Profit |
|||||||||
|
Share |
premium |
redemption |
for own |
acquisition |
Merger |
investment |
and loss |
||||||||
|
capital |
account |
reserve |
shares |
reserve |
reserve |
reserve |
account |
Total |
|||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||||
|
Group |
|||||||||||||||
|
At 1 January 2007 |
114 |
2,418 |
50 |
(150) |
62,277 |
33,152 |
1,719 |
(19,326) |
80,254 |
||||||
|
Issue of deferred consideration |
|||||||||||||||
|
shares |
4 |
- |
- |
- |
- |
5,590 |
- |
- |
5,594 |
||||||
|
Share based payment credit |
- |
- |
- |
- |
- |
- |
- |
671 |
671 |
||||||
|
Dividend payments |
- |
- |
- |
- |
- |
- |
- |
(1,991) |
(1,991) |
||||||
|
Actuarial gains net of deferred |
|
|
|
|
|
|
|
||||||||
|
taxation on pension scheme |
- |
- |
- |
- |
- |
- |
- |
2,272 |
2,272 |
||||||
|
Loss for the year |
- |
- |
- |
- |
- |
- |
- |
(2,164) |
(2,164) |
||||||
|
Mark to market of available for |
|
|
|
|
|
|
|
|
|
||||||
|
sale investments |
- |
- |
- |
- |
- |
- |
(3,769) |
- |
(3,769) |
||||||
|
Deferred tax on reduction |
|||||||||||||||
|
in fair value of investments |
- |
- |
- |
- |
- |
- |
1,105 |
- |
1,105 |
||||||
|
As at 31 December 2007 |
118 |
2,418 |
50 |
(150) |
62,277 |
38,742 |
(945) |
(20,538) |
81,972 |
||||||
|
As at 1 January 2008 |
118 |
2,418 |
50 |
(150) |
62,277 |
38,742 |
(945) |
(20,538) |
81,972 |
||||||
|
Conversion of convertible shares |
(4) |
4 |
- |
- |
- |
- |
- |
- |
- |
||||||
|
Reverse acquisition accounting |
- |
(2,422) |
- |
- |
2,422 |
- |
- |
- |
- |
||||||
|
Share buy back |
- |
- |
- |
(687) |
- |
- |
- |
- |
(687) |
||||||
|
Share based payment credit |
- |
- |
- |
- |
- |
- |
- |
1,695 |
1,695 |
||||||
|
Dividend payments |
- |
- |
- |
- |
- |
- |
- |
(18,685) |
(18,685) |
||||||
|
Loss for the year |
- |
- |
- |
- |
- |
- |
- |
(7,789) |
(7,789) |
||||||
|
Mark to market of available for |
|
||||||||||||||
|
sale investments taken to |
|||||||||||||||
|
income statement |
- |
- |
- |
- |
- |
- |
1,765 |
- |
1,765 |
||||||
|
Mark to market of available for |
|||||||||||||||
|
sale investments |
- |
- |
- |
- |
- |
- |
(451) |
- |
(451) |
||||||
|
Deferred tax on mark to |
|
||||||||||||||
|
market investments |
- |
- |
- |
- |
- |
- |
(369) |
- |
(369) |
||||||
|
At 31 December 2008 |
114 |
- |
50 |
(837) |
64,699 |
38,742 |
- |
(45,317) |
57,451 |
||||||
|
Reserve |
Description and purpose |
||||||||||||||
|
Share premium |
Amounts subscribed for share capital in excess of nominal value. |
||||||||||||||
|
Capital redemption |
Amounts transferred from share capital on redemption of preference shares. |
||||||||||||||
|
Reserve for own shares |
The cost of own shares purchased for the Employee Benefit Trust. |
||||||||||||||
|
Treasury share reserve |
The costs of own shares purchased for holding in Treasury. |
||||||||||||||
|
Reverse acquisition reserve |
Amounts arising on adopting reverse acquisition accounting for the acquisition of Swan Hill Group PLC by Raven Mount plc and subsequently the acquisition of Raven Mount plc by Raven Mount Group plc. |
||||||||||||||
|
Merger reserve |
Amounts arising on the acquisition of Raven Property Holdings Plc, value of consideration paid in shares in excess of nominal value of shares. |
||||||||||||||
|
Available for sale investments reserve |
Amounts arising on the mark to market of the available for sale investments less deferred taxation. |
||||||||||||||
|
23b. |
Other reserves |
|||||||||||
|
2008 |
2007 |
|||||||||||
|
£'000 |
£'000 |
|||||||||||
|
Treasury share reserve |
(687) |
- |
||||||||||
|
Reserve for own shares |
(150) |
(150) |
||||||||||
|
(837) |
(150) |
|||||||||||
|
Capital redemption reserve |
50 |
50 |
||||||||||
|
Reverse acquisition reserve |
64,699 |
62,277 |
||||||||||
|
Merger reserve |
38,742 |
38,742 |
||||||||||
|
Available for sale investments reserve |
- |
(945) |
||||||||||
|
102,654 |
99,974 |
|||||||||||
|
24. |
Commitments |
|||||||||||||
|
Commitments contracted for at 31 December 2008 but not provided for in these accounts were £nil (2007: £nil). |
||||||||||||||
|
As at 31 December 2008, the Group has outstanding total commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows: |
||||||||||||||
|
Operating leases-lessee |
||||||||||||||
|
The Group leases all of its properties, the terms of property leases vary, although they all tend to be tenant repairing with rent reviews every 2 to 5 years and some have break clauses. |
||||||||||||||
|
2008 |
2007 |
|||||||||||||
|
£'000 |
£'000 |
|||||||||||||
|
Not later than one year |
704 |
747 |
||||||||||||
|
Later than one year and not later than five years |
2,034 |
2,494 |
||||||||||||
|
Later than five years |
540 |
810 |
||||||||||||
|
3,278 |
4,051 |
|||||||||||||
|
Operating leases-lessor |
||||||||||||||
|
Certain properties may be vacated prior to the end of the lease term. Where possible the Group always endeavours to sub-lease such vacant space on short-term lets. An onerous lease provision is recognised where the rents receivable over the lease term are either contracted to be or, where a property remains vacant for part or all of its remaining lease term, are expected to be less than the obligation to the head lessor. |
||||||||||||||
|
The minimum rent receivables under non-cancellable operating leases are as follows: |
||||||||||||||
|
2008 |
2007 |
|||||||||||||
|
£'000 |
£'000 |
|||||||||||||
|
Not later than one year |
305 |
325 |
||||||||||||
|
Later than one year and not later than five years |
696 |
1,001 |
||||||||||||
|
Later than five years |
- |
- |
||||||||||||
|
1,001 |
1,326 |
|||||||||||||
|
25. |
Notes supporting the cash flow statement |
|||||||||
|
Cash and cash equivalents for purposes of the cash flow statement comprises: |
||||||||||
|
2008 |
2007 |
|||||||||
|
£'000 |
£'000 |
|||||||||
|
Cash available on demand |
490 |
1,387 |
||||||||
|
Short-term deposits |
37,048 |
3,005 |
||||||||
|
37,538 |
4,392 |
|||||||||
|
Overdrafts |
(15,134) |
(18,330) |
||||||||
|
Cash and cash equivalents at 31 December |
22,404 |
(13,938) |
||||||||
|
All short-term deposits are accessible within 3 months. |
||||||||||
|
26. |
Statutory information The financial information set out in this announcement does not constitute the Group's statutory financial statements for the year ended 31 December 2008 but is derived from those financial statements. The financial information is extracted from the audited financial statements of the Group for the year ended 31 December 2008 which were approved by the Board of Directors on 31 March 2009. The Company's auditors, BDO Stoy Hayward LLP, have reported on the accounts for the period ended 31 December 2008 under section 495 of the Companies Act 2006 ("Act"). Their report was unqualified and did not contain statements made under section 498 (2) and section 498 (3) of the Act. Copies of the full financial statements will be posted to shareholders as soon as possible. The financial statements for the year ended 31 December 2008 will be delivered to the Registrar of Companies following the Annual General Meeting.
|
|||||||||
Related Shares:
RAV.L