26th Jan 2009 10:33
Pochin's PLC
Interim Report
30 November 2008
Headlines
Revenue £49.9m (2007: £54.4m)
Profit before tax £0.6m (2007: £2.1m) after property write downs of £2.4m
Interim dividend 1.5p (2007: 3.0p)
Net cash generated £5.7m (2007: £8.7m outflow)
Net debt reduced to £37.3m, gearing 77% (2007: 89%)
Banking facilities recently all satisfactorily renewed
Chairman's Statement
Results
The results for the 6 months ended 30 November 2008 show pre-tax profits of £0.6million (2007: £2.1million) on turnover of £49.9million (2007: £54.4million). An interim dividend of 1.5p (2007: 3.0p) is declared.
Divisional Reports
Construction
Following the reorganisation reported in the 2008 Annual Report, the division has performed creditably under adverse trading conditions. This has contributed to improved margins which, combined with the benefits of cost savings in overheads, have led to an improved result, albeit from reduced turnover.
Concrete Pumping
Trading in the Concrete Pumping division has been difficult during the first half of the year. The effect of weakening demand was exacerbated by sharply higher fuel prices for much of the period. Whilst falling oil prices have now brought some welcome relief, demand for concrete pumping remains subdued, particularly in the private sector. The division has recently won useful business in connection with infrastructure works for Olympic Games projects in London and Weymouth.
Property
Despite the well publicised continuing deterioration of conditions in all property markets, the division has achieved profitable disposals during the period. These have offset the necessary write-downs in the value of the group's wholly-owned portfolio.
In joint venture, the large refurbishment project at Walker House, Liverpool has been completed on time and on budget, with 100,000 sq ft of office space being successfully handed over to the Ministry of Defence under the terms of its (25) year lease.
Residential
This division has been badly affected by the collapse in the housing market. Steps have been taken to reduce fixed costs to a minimum and no speculative activity is being undertaken. The division's objective is now to realise the Group's investment in residential property in a controlled manner, and similarly to dispose of its interest in sites with the benefits of planning permission as opportunities allow. Fortunately, the exposure to the housing market is relatively modest in the context of the group as a whole.
General
Each of the group's areas of activity is affected by the sharply deteriorating conditions being experienced in the UK economy in general and in the property market in particular. Early action was taken to react to these painful circumstances with strong emphasis being placed on cost reduction and cash conservation. There was an increase in net cash during the period of £5.7million: the Group's banking facilities have recently been satisfactorily renewed.
Given the strong balance sheet, and the maintenance of the Board's firm control on costs and speculative risk, the Group is well positioned to face the problems being experienced by all those involved in property. It is to be profoundly hoped that the deflationary forces which threaten the property industry will be quickly defeated. Meanwhile Pochin's well deserved reputation for good quality and reliable service will be of great benefit.
Richard Fildes
Chairman
26 January 2009
Enquiries:
Pochin's PLC
David Shaw, Chief Executive 01606 833 333
John Edwards, Finance Director
Charles Stanley Securities
Philip Davies/ Rick Thompson 0207 149 6457
Consolidated income statement
|
6 months ended |
6 months ended |
12 months ended |
||
|
30 November 2008 |
30 November 2007 |
31 May 2008 |
||
|
Notes |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Revenue |
3 |
49,935 |
54,414 |
115,273 |
|
Cost of sales |
(43,382) |
(50,728) |
(106,715) |
|
|
Gross profit |
6,553 |
3,686 |
8,558 |
|
|
Operating expenses |
(5,676) |
(5,701) |
(16,751) |
|
|
Other operating income |
1,915 |
2,126 |
4,254 |
|
|
Losses on revaluation of investment properties |
(2,000) |
- |
2,548 |
|
|
Operating profit |
792 |
111 |
(1,391) |
|
|
Share of (loss)/profit after taxation in joint ventures |
(365) |
1,940 |
1,863 |
|
|
Share of profit after taxation in associates |
14 |
119 |
437 |
|
|
Finance income |
1,563 |
1,394 |
3,400 |
|
|
Finance cost |
(1,430) |
(1,470) |
(2,533) |
|
|
Profit before taxation |
3 |
574 |
2,094 |
1,776 |
|
Taxation |
(255) |
48 |
859 |
|
|
Profit for the period |
319 |
2,142 |
2,635 |
|
|
Attributable to: |
||||
|
Equity holders of the company |
303 |
2,126 |
2,603 |
|
|
Minority interest |
16 |
16 |
32 |
|
|
319 |
2,142 |
2,635 |
||
|
Earnings per share (basic) |
6 |
1.5p |
10.4p |
12.8p |
|
Earnings per share (diluted) |
6 |
1.5p |
10.4p |
12.7p |
|
Dividends proposed for the period |
5 |
1.5p |
3.0p |
3.0p |
Consolidated statement of recognized income and expense
|
6 months ended |
6 months ended |
12 months ended |
||
|
30 November 2008 |
30 November 2007 |
31 May 2008 |
||
|
£'000 |
£'000 |
£'000 |
||
|
|
|
|||
|
Actuarial (losses)/gains on defined benefit pension scheme |
(1,530) |
383 |
1,189 |
|
|
Deferred taxation on pension scheme deficit |
428 |
(115) |
(355) |
|
|
Net (expense)/income recognised directly in equity |
(1,102) |
268 |
834 |
|
|
Profit for the financial period |
319 |
2,142 |
2,635 |
|
|
Total (losses)/gains recognised since last period |
(783) |
2,410 |
3,469 |
|
|
Attributable to: |
||||
|
Equity holders of the company |
(799) |
2,394 |
3,437 |
|
|
Minority interest |
16 |
16 |
32 |
|
|
(783) |
2,410 |
3,469 |
||
Consolidated Balance Sheet
|
As at |
As at |
As at |
||
|
30 November |
30 November |
31 May |
||
|
2008 |
2007 |
2008 |
||
|
Notes |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Non current assets |
||||
|
Property, plant and equipment |
3,132 |
4,021 |
3,613 |
|
|
Investment properties |
44,167 |
41,090 |
46,167 |
|
|
Investments |
||||
|
Joint ventures |
17,547 |
24,704 |
19,946 |
|
|
Associates |
2,789 |
1,309 |
3,286 |
|
|
Other |
2,507 |
2,157 |
2,157 |
|
|
22,843 |
28,170 |
25,389 |
||
|
Retirement benefit asset |
- |
- |
861 |
|
|
Total non current assets |
70,142 |
73,281 |
76,030 |
|
|
Current assets |
||||
|
Inventories |
29,594 |
39,187 |
32,177 |
|
|
Trade and other receivables |
16,911 |
18,279 |
23,542 |
|
|
Cash and cash equivalents |
8,779 |
365 |
3,988 |
|
|
Financial derivatives |
- |
3 |
515 |
|
|
Corporation tax recoverable |
- |
612 |
35 |
|
|
Total current assets |
55,284 |
58,446 |
60,257 |
|
|
Current liabilities |
||||
|
Trade and other payables |
21,995 |
24,289 |
29,296 |
|
|
Corporation tax |
699 |
- |
- |
|
|
Bank loans |
10,504 |
15,800 |
10,534 |
|
|
Bank overdrafts |
22,961 |
22,587 |
23,918 |
|
|
Financial derivatives |
1,745 |
- |
- |
|
|
Total current liabilities |
57,904 |
62,676 |
63,748 |
|
|
Net current (liabilities)/assets |
(2,620) |
(4,230) |
(3,491) |
|
|
Non current liabilities |
||||
|
Bank loans |
12,578 |
8,813 |
12,411 |
|
|
Retirement benefit obligation |
452 |
27 |
- |
|
|
Deferred tax liabilities |
214 |
2,412 |
1,374 |
|
|
Long term provisions |
482 |
484 |
496 |
|
|
Other payables |
5,204 |
4,757 |
5,204 |
|
|
Total non current liabilities |
18,930 |
16,493 |
19,485 |
|
|
Net assets |
48,592 |
52,558 |
53,054 |
|
|
Shareholders' equity |
||||
|
Share capital |
5,200 |
5,200 |
5,200 |
|
|
Own shares |
(954) |
(954) |
(954) |
|
|
Revaluation reserve |
89 |
208 |
178 |
|
|
Hedge reserve |
(2,487) |
- |
- |
|
|
Retained earnings |
46,540 |
47,888 |
48,419 |
|
|
|
|
|
||
|
Equity shareholders' funds |
48,388 |
52,342 |
52,843 |
|
|
Minority interest |
204 |
216 |
211 |
|
|
Total equity |
3 |
48,592 |
52,55 |
53,054 |
Consolidated Cash Flow Statement
|
6 months ended |
6 months ended |
12 months ended |
|||||
|
30 November 2008 |
30 November 2007 |
31 May 2008 |
|||||
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|||||||
|
Net cash from operating activities |
|||||||
|
Profit for the period |
319 |
2,142 |
2,635 |
||||
|
Income tax |
255 |
(48) |
(859) |
||||
|
Finance income |
(1,563) |
(1,394) |
(3,400) |
||||
|
Finance cost |
1,430 |
1,470 |
2,533 |
||||
|
Share of results of joint ventures and associates |
351 |
(2,059) |
(2,300) |
||||
|
Depreciation charge |
197 |
363 |
684 |
||||
|
Charge in respect of share based payments |
20 |
- |
46 |
||||
|
Profit on sale of fixed assets |
(58) |
(89) |
(178) |
||||
|
Losses/(gains) on revaluation of investment properties |
2,000 |
- |
(2,548) |
||||
|
Provision against investments in joint ventures |
389 |
- |
4,632 |
||||
|
Income from joint ventures and associates |
18 |
248 |
259 |
||||
|
|
|
||||||
|
Operating profit before changes in working capital |
3,358 |
633 |
1,504 |
||||
|
Decrease/(increase) in inventories |
2,583 |
(3,549) |
3,461 |
||||
|
Decrease/(increase) in receivables |
6,631 |
751 |
(4,774) |
||||
|
(Decrease)/increase in payables |
(7,412) |
(1,083) |
4,612 |
||||
|
|
|
||||||
|
5,160 |
(3,248) |
4,803 |
|||||
|
Interest paid |
(724) |
(590) |
(1,249) |
||||
|
Income taxes paid |
(26) |
(667) |
(516) |
||||
|
Net cash from/(used in) operating activities |
4,410 |
(4,505) |
3,038 |
||||
|
Investing activities |
|||||||
|
Interest received |
714 |
607 |
1,630 |
||||
|
Purchase of investment properties |
- |
- |
(2,529) |
||||
|
Purchase of property, plant and equipment |
- |
(167) |
(261) |
||||
|
Proceeds from sale of property, plant and equipment |
342 |
272 |
542 |
||||
|
Increase in interest in other investments |
(350) |
- |
- |
||||
|
Decrease/(increase) in interest in joint ventures and associates |
1,106 |
(10,731) |
(12,372) |
||||
|
Net cash from/(used in) investing activities |
1,812 |
(10,019) |
(12,990) |
||||
|
Financing activities |
|||||||
|
Proceeds from new loans |
414 |
5,000 |
13,421 |
||||
|
Repayment of loans |
(277) |
(212) |
(10,302) |
||||
|
Dividends paid |
5 |
(611) |
(1,300) |
(1,911) |
|||
|
|
|
|
|||||
|
Net cash (used in)/from financing activities |
(474) |
3,488 |
1,208 |
||||
|
Net increase/(decrease) in cash and cash equivalents |
5,748 |
(11,036) |
(8,744) |
||||
|
Cash and cash equivalents at beginning of period |
(19,930) |
(11,186) |
(11,186) |
||||
|
Cash and cash equivalents at end of period |
(14,182) |
(22,222) |
(19,930) |
||||
Notes
1. The interim report was approved by the board on 22 January 2009.
2. Basis of preparation
The interim financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the group's published consolidated financial statements for the year ended 31 May 2008.
3. Segmental information
For management purposes, the group is currently organised into four operating business segments:
Construction, Property, Residential and Concrete Pumping.
As operations are carried out entirely within the UK, there is no secondary segmental information.
Inter segmental pricing is done on an arms length open market basis.
6 months ended 30 November 2008
|
Concrete |
Group |
Group |
||||
|
Construction |
Property |
Residential |
Pumping |
Management |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Revenue |
||||||
|
External sales |
35,329 |
7,054 |
1,221 |
6,331 |
- |
49,935 |
|
Inter-segment sales |
289 |
- |
- |
359 |
- |
648 |
|
Eliminations |
(289) |
- |
- |
(359) |
- |
(648) |
|
Total revenue |
35,329 |
7,054 |
1,221 |
6,331 |
- |
49,935 |
|
Segment result |
||||||
|
Operating profit/(loss) |
106 |
3,633 |
(1,791) |
(494) |
(662) |
792 |
|
Share of results of joint ventures and associates |
- |
(351) |
- |
- |
- |
(351) |
|
Net finance income |
82 |
15 |
- |
24 |
12 |
133 |
|
|
||||||
|
Profit/(loss) before taxation |
188 |
3,297 |
(1,791) |
(470) |
(650) |
574 |
|
Taxation |
(255) |
|||||
|
Profit for the period |
319 |
|||||
|
Elimination |
||||||
|
Concrete |
of inter-segment |
|||||
|
Construction |
Property |
Residential |
Pumping |
items |
Group Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Assets and liabilities |
||||||
|
Segment assets |
24,232 |
93,428 |
3,767 |
7,302 |
(23,989) |
104,740 |
|
Investment in equity accounted joint ventures and associates |
||||||
|
- |
20,686 |
- |
- |
- |
20,686 |
|
|
Total assets |
24,232 |
114,114 |
3,767 |
7,302 |
(23,989) |
125,426 |
|
Segment liabilities |
18,488 |
75,058 |
5,524 |
1,753 |
(23,989) |
76,834 |
|
Net assets/(liabilities) |
5,744 |
39,056 |
(1,757) |
5,549 |
- |
48,592 |
|
Other information |
||||||
|
Depreciation |
38 |
44 |
115 |
- |
197 |
|
|
Provision against investment in joint ventures |
- |
389 |
- |
- |
389 |
|
Segmental information
6 months ended 30 November 2007
|
Concrete |
Group |
Group |
||||
|
Construction |
Property |
Residential |
Pumping |
Management |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Revenue |
||||||
|
External sales |
42,274 |
- |
4,241 |
7,899 |
- |
54,414 |
|
Inter-segment sales |
731 |
- |
- |
529 |
- |
1,260 |
|
Eliminations |
(731) |
- |
- |
(529) |
- |
(1,260) |
|
Total revenue |
42,274 |
- |
4,241 |
7,899 |
- |
54,414 |
|
Segment result |
||||||
|
Operating profit/(loss) |
(259) |
1,054 |
(295) |
468 |
(857) |
111 |
|
Share of results of joint ventures and associates |
- |
(2,059) |
- |
- |
- |
(2,059) |
|
Net finance income/(costs) |
88 |
(199) |
2 |
6 |
27 |
(76) |
|
|
||||||
|
(Loss)/profit before taxation |
(171) |
2,914 |
(293) |
474 |
(830) |
2,094 |
|
Taxation |
48 |
|||||
|
Profit for the period |
2,142 |
|||||
|
Elimination |
||||||
|
Concrete |
of inter-segment |
|||||
|
Construction |
Property |
Residential |
Pumping |
items |
Group Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Assets and liabilities |
||||||
|
Segment assets |
24,239 |
91,092 |
13,556 |
8,220 |
(31,393) |
105,714 |
|
Investment in equity accounted joint ventures and associates |
||||||
|
- |
26,013 |
- |
- |
- |
26,013 |
|
|
Total assets |
24,239 |
117,105 |
13,556 |
8,220 |
(31,393) |
131,727 |
|
Segment liabilities |
18,677 |
76,744 |
13,183 |
1,958 |
(31,393) |
79,169 |
|
Net assets |
5,562 |
40,361 |
373 |
6,262 |
- |
52,558 |
|
Other information |
||||||
|
Capital expenditure |
44 |
- |
- |
123 |
- |
167 |
|
Depreciation |
37 |
46 |
- |
280 |
- |
363 |
Segmental information
12 months ended 31 May 2008
|
Concrete |
Group |
Group |
||||
|
Construction |
Property |
Residential |
Pumping |
Management |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Revenue |
||||||
|
External sales |
82,239 |
10,250 |
8,123 |
14,661 |
- |
115,273 |
|
Inter-segment sales |
2,524 |
- |
- |
915 |
- |
3,439 |
|
Eliminations |
(2,524) |
- |
- |
(915) |
- |
(3,439) |
|
Total revenue |
82,239 |
10,250 |
8,123 |
14,661 |
- |
115,273 |
|
Segment result |
||||||
|
Operating profit/(loss) |
179 |
1,279 |
(1,581) |
255 |
(1,523) |
(1,391) |
|
Share of results of joint ventures and associates |
- |
2,300 |
- |
- |
- |
2,300 |
|
Net finance income/(costs) |
129 |
697 |
3 |
4 |
34 |
867 |
|
|
||||||
|
Profit/(loss) before taxation |
308 |
4,276 |
(1,578) |
259 |
(1,489) |
1,776 |
|
Taxation |
859 |
|||||
|
Profit for the period |
2,635 |
|||||
|
Elimination |
||||||
|
Concrete |
of inter-segment |
|||||
|
Construction |
Property |
Residential |
Pumping |
items |
Group Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Assets and liabilities |
||||||
|
Segment assets |
29,590 |
89,138 |
7,933 |
7,704 |
(21,310) |
113,055 |
|
Investment in equity accounted joint ventures and associates |
||||||
|
- |
23,232 |
- |
- |
- |
23,232 |
|
|
Total assets |
29,590 |
112,370 |
7,933 |
7,704 |
(21,310) |
136,287 |
|
Segment liabilities |
23,307 |
71,298 |
8,384 |
1,554 |
(21,310) |
83,233 |
|
Net assets/(liabilities) |
6,283 |
41,072 |
(451) |
6,150 |
- |
53,054 |
|
Other information |
||||||
|
Capital expenditure |
74 |
2,529 |
- |
187 |
- |
2,790 |
|
Depreciation |
78 |
91 |
- |
515 |
- |
684 |
|
Provision against investment in joint ventures |
- |
4,632 |
- |
- |
- |
4,632 |
|
Impairment of inventories |
- |
- |
583 |
- |
- |
583 |
4 Taxation
The taxation charge is calculated by applying the estimated effective annual tax rate to the profit for the period. The tax assessed for the period is higher than the standard rate of corporation tax in the United Kingdom as a result of the utilisation of losses in joint venture companies.
5. Dividends
|
6 months ended 30 November 2008 |
6 months ended 30 November 2007 |
12 months ended 31 May 2008 |
|
|
£'000 |
£'000 |
£'000 |
|
|
Interim paid 3.0p per share |
- |
- |
611 |
|
Final paid 3.0p (2007: 6.25p) per share |
611 |
1,300 |
1,300 |
|
611 |
1,300 |
1,911 |
The interim dividend of 1.5p (2007: 3.0p) per share will be paid on 10 March 2009 to shareholders on the register at 6 February 2009.
The dividend has not been included as a liability as at 30 November 2008.
6 Earnings per share
The calculation of earnings per share (basic and diluted) is based on group profit after taxation and minority interests of £303,000 (2007 : £2,126,000) and the 20,800,000 ordinary shares of 25p in issue at 30 November 2008 and 30 November 2007.
The number of shares in the calculation has been reduced at 30 November 2008 for the 445,000 (2007 : 449,500) shares held in the Employee Share Trust. Basic earnings per share is 1.5p (2007: 10.4p). The assumed conversion of dilutive options increases the number of shares by 432,000 (2007: 38,000) shares and so diluted earnings per share remains at 1.5p (2007:10.4p).
|
6 months ended 30 November 2008 |
|||
|
Weighted average |
|||
|
Earnings |
no. of shares |
Per share |
|
|
£'000 |
'000 |
p |
|
|
Basic EPS |
303 |
20,355 |
1.5 |
|
Effect of share options |
- |
432 |
- |
|
Diluted EPS |
303 |
20,787 |
1.5 |
|
6 months ended 30 November 2007 |
|||
|
Weighted average |
|||
|
Earnings |
no. of shares |
Per share |
|
|
£'000 |
'000 |
p |
|
|
Basic EPS |
2,126 |
20,351 |
10.4 |
|
Effect of share options |
- |
38 |
- |
|
Diluted EPS |
2,126 |
20,389 |
10.4 |
|
12 months ended 31 May 2008 |
|||
|
Weighted average |
|||
|
Earnings |
no. of shares |
Per share |
|
|
£'000 |
'000 |
p |
|
|
Basic EPS |
2,603 |
20,353 |
12.8 |
|
Effect of share options |
- |
95 |
(0.1) |
|
Diluted EPS |
2,603 |
20,448 |
12.7 |
7 The comparative figures for the year ended 31 May 2008 do not constitute statutory accounts for the purpose of section 240 of the Companies Act 1985. A copy of the statutory accounts for the year ended 31 May 2008, which were prepared under International
8 This interim report is available on the group's website (www.pochins.plc.uk)
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