31st Jan 2011 07:00
Pochin's PLC
(the "Group")
Half year report for the six months to 30 November 2010
Headlines
·; Revenue £41.8m (2009: £47.5m)
·; Loss before tax £0.47m (2009: £4.37m loss)
·; Net asset value decreased by £0.3m in the period to £25.6m
Chairman's Statement
The results for the six months ended 30 November 2010 show a loss before tax of £0.47m (2009: £4.37m loss) on turnover of £41.8m (2009: £47.5m).
No interim dividend is declared (2009: Nil)
After the substantial provisions which resulted in the heavy losses for the year ended 31st May 2010, it is encouraging to be able to report an improved performance in the first six months of the current year. Nonetheless, conditions in the regional property market and construction sector generally remain subdued.
The construction division has again performed creditably, turning in a near break even result on reduced levels of turnover. The forward order book, remains healthy, although the start dates for a number of key contracts have been delayed, making a profitable outcome for the division in the second half of the year increasingly challenging.
The concrete pumping division, though still loss making, has shown signs of improvement, with better margins and tighter cost control. The results for the full year should show the benefit of the re-organisation which took place last summer but will inevitably be influenced by the level of public sector spending.
The Group's property investment and development activities are centred largely in North West England which, like most regions, is experiencing only a slow improvement in the market for commercial property. The income from the division's portfolio is proving resilient with low levels of void space, but opportunities for development remain limited by weak occupier demand and tight credit conditions. Steady progress is being made with disposals of stock in the former homes division.
I am pleased to be able to confirm that the sale of the development site at Birkenhead, previously held in joint venture and highlighted in the 2010 annual report and accounts, was successfully completed in October. Issues in current joint ventures, also emphasised in that report, largely remain to be resolved and discussions continue with funders to bring to an end the Group's financial exposure associated with these schemes.
With the continuing support of the Group's bankers, The Royal Bank of Scotland, and no renewed decline in confidence in the regional construction and commercial property markets, the Group should make further progress in the second half of the year.
Richard Fildes
Chairman
Enquiries:
Pochin's PLC
John Moss, Chief Executive 01606 833 333
John Edwards, Finance Director
Charles Stanley Securities 020 7149 6000
Russell Cook
Carl Holmes
Blythe Weigh Communications 020 7138 3204
Paul Weigh 07989 129 658
Matthew Neal 07917 800 011
Consolidated income statement
6 months ended | 6 months ended | 12 months ended | ||
30 November 2010 | 30 November 2009 | 31 May 2010 | ||
Notes | £'000 | £'000 | £'000 | |
Revenue | 3 | 41,794 | 47,502 | 74,819 |
Cost of sales | (37,747) | (44,507) | (73,316) | |
Gross profit | 4,047 | 2,995 | 1,503 | |
Operating expenses | (5,000) | (8,196) | (19,520) | |
Other operating income | 1,341 | 1,253 | 3,268 | |
Gains on revaluation of investment properties |
- |
- |
530 | |
Operating profit/(loss) | 388 | (3,948) | (14,219) | |
Share of loss after taxation in joint ventures |
(315) |
(557) |
(1,948) | |
Share of profit after taxation in associates |
32 |
211 |
121 | |
Finance income | 682 | 1,041 | 2,074 | |
Finance cost | (1,256) | (1,121) | (2,260) | |
Loss before taxation | 3 | (469) | (4,374) | (16,232) |
Taxation | (20) | 1,300 | 724 | |
Loss for the period | (489) | (3,074) | (15,508) | |
Attributable to: | ||||
Equity holders of the company | (508) | (3,092) | (15,545) | |
Minority interest | 19 | 18 | 37 | |
(489) | (3,074) | (15,508) | ||
Earnings per share (basic) | 6 | (2.5)p | (15.2)p | (76.4)p |
Earnings per share (diluted) | 6 | (2.5)p | (15.2)p | (76.4)p |
Dividends proposed for the period | 5 | - | - | - |
Consolidated statement of comprehensive income
6 months ended | 6 months ended | 12 months ended | ||
30 November 2010 | 30 November 2009 | 31 May 2010 | ||
£'000 | £'000 | £'000 | ||
Loss for the period | (489) | (3,074) | (15,508) | |
Actuarial gains and losses | 206 | (1,443) | (312) | |
Deferred taxation on actuarial gains and losses |
(58) |
404 |
88 | |
Cashflow hedging | ||||
Current year fair value movement | 282 | (718) | 4,613 | |
Reclassification to profit or loss | - | - | (3,322) | |
Deferred taxation on cashflow hedging |
(236) |
201 |
(204) | |
Revaluation of property, plant and equipment |
- |
- |
2,258 | |
Total comprehensive income for the period |
(295) |
(4,630) |
(12,387) | |
Attributable to non controlling interests | 19 | 18 | 37 | |
Attributable to owners of the parent | (314) | (4,648) | (12,424) | |
(295) |
(4,630) |
(12,387) |
Consolidated Balance Sheet
As at | As at | As at | ||
30 November | 30 November | 31 May | ||
2010 | 2009 | 2010 | ||
Notes | £'000 | £'000 | £'000 | |
Non current assets | ||||
Property, plant and equipment | 5,039 | 2,779 | 4,648 | |
Investment properties | 29,116 | 25,917 | 29,116 | |
Investments | ||||
Joint ventures | 4,505 | 9,840 | 8,855 | |
Associates | 1,426 | 2,597 | 2,033 | |
Available for sale | 2,567 | 2,730 | 2,190 | |
8,498 | 15,167 | 13,078 | ||
Deferred tax assets | 1,618 | 2,944 | 1,946 | |
Total non current assets | 44,271 | 46,807 | 48,788 | |
Current assets | ||||
Inventories | 18,392 | 26,960 | 21,891 | |
Trade and other receivables | 13,832 | 14,699 | 12,618 | |
Cash and cash equivalents | 8,810 | 8,434 | 8,328 | |
Corporation tax recoverable | 381 | 206 | 305 | |
Total current assets | 41,415 | 50,299 | 43,142 | |
Current liabilities | ||||
Trade and other payables | 27,901 | 20,688 | 25,956 | |
Bank loans | 11,234 | 13,219 | 12,904 | |
Bank overdrafts | 16,982 | 21,992 | 22,370 | |
Financial derivatives | 315 | 890 | 621 | |
Total current liabilities | 56,432 | 56,789 | 61,851 | |
Net current liabilities | (15,017) | (6,490) | (18,709) | |
Non current liabilities | ||||
Retirement benefit obligation | 2,430 | 3,826 | 2,709 | |
Provisions | - | 91 | - | |
Other payables | 1,248 | 2,741 | 1,458 | |
Total non current liabilities | 3,678 | 6,658 | 4,167 | |
Net assets | 25,576 | 33,659 | 25,912 | |
Shareholders' equity | ||||
Share capital | 5,200 | 5,200 | 5,200 | |
Own shares | (745) | (745) | (745) | |
Revaluation reserve | 2,265 | 75 | 2,265 | |
Hedge reserve | (947) | (3,238) | (1,229) | |
Retained earnings | 19,606 | 32,166 | 20,202 | |
Equity shareholders' funds | 25,379 | 33,458 | 25,693 | |
Minority interest | 197 | 201 | 219 | |
Total equity | 3 | 25,576 | 33,659 | 25,912 |
Consolidated Cash Flow Statement
6 months ended | 6 months ended | 12 months ended | |||||
30 November 2010 | 30 November 2009 | 31 May 2010 | |||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
Net cash from operating activities | |||||||
Loss for the period | (489) | (3,074) | (15,508) | ||||
Income tax | 20 | (1,300) | (724) | ||||
Finance income | (682) | (1,041) | (2,074) | ||||
Finance cost | 1,256 | 1,121 | 2,260 | ||||
Share of results of joint ventures and associates | 283 | 346 | 1,827 | ||||
Cash flow hedge movement in joint ventures |
10 |
590 |
(657) | ||||
Depreciation charge | 128 | 106 | 209 | ||||
Credit in respect of share based payments |
- |
- |
(5) | ||||
Profit on sale of property, plant and equipment |
- |
(14) |
(28) | ||||
Profit on sale of investment properties | - | - | (655) | ||||
Gains on revaluation of investment properties |
- |
- |
(530) | ||||
Provision against investments in joint ventures |
- |
3,715 |
4,215 | ||||
Provision against investments in available for sale investments |
- |
515 |
998 | ||||
Net movement on disposal of joint ventures |
4,106 |
- |
649 | ||||
Income from joint ventures and associates |
270 |
27 |
53 | ||||
Operating profit/(loss) before changes in working capital |
4,902 |
991 |
(9,970) | ||||
Decrease in inventories | 3,499 | 2,864 | 7,933 | ||||
(Increase)/decrase in receivables | (1,214) | 10,484 | 12,565 | ||||
(Increase)/decrease in payables | 1,623 | (11,617) | (7,194) | ||||
8,810 | 2,722 | 3,334 | |||||
Interest paid | (624) | (448) | (914) | ||||
Income (paid)/received | (75) | 364 | 876 | ||||
Net cash from operating activities | 8,111 | 2,638 | 3,296 | ||||
Investing activities | |||||||
Interest received | 37 | 102 | 792 | ||||
Purchase of investment properties | - | - | (2,645) | ||||
Purchase of property, plant and equipment |
(580) |
- |
|
(45) | |||
Proceeds from sale of investment properties |
- |
- |
890 | ||||
Proceeds from sale of property, plant and equipment |
61 |
58 |
|
144 | |||
Decrease/(increase) in interest in joint ventures and associates |
288 |
(707) |
|
(567) | |||
Increase in interest in available for sale investments |
(377) |
(515) |
(458) | ||||
Net cash used in investing activities | (571) | (1,062) | (1,889) | ||||
Financing activities | |||||||
Repayment of loans | (1,670) | (2,063) | (2,378) | ||||
Net cash used in financing activities | (1,670) | (2,063) | (2,378) | ||||
Net increase/(decrease) in cash and cash equivalents | 5,870 |
(487) |
(971) | ||||
Cash and cash equivalents at beginning of period |
(14,042) |
(13,071) |
(13,071) | ||||
Cash and cash equivalents at end of period |
(8,172) |
(13,558) |
(14,042) | ||||
Notes
1. The interim report was approved by the board on 28 January 2011.
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 2010.
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 2010
Concrete | Group | Group | ||||
Construction | Property | Residential | Pumping | Management | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Revenue | ||||||
External sales | 21,626 | 13,560 | 1,849 | 4,759 | - | 41,794 |
Inter-segment sales | 678 | - | - | 34 | - | 712 |
Eliminations | (678) | - | - | (34) | - | (712) |
Total revenue | 21,626 | 13,560 | 1,849 | 4,759 | - | 41,794 |
Segment result | ||||||
Operating profit/(loss) | (86) | 1,678 | 36 | (499) | (741) | 388 |
Share of results of joint ventures and associates | -
| (283)
| -
| -
| -
| (283)
|
Net finance cost | 8 | (552) | (14) | (17) | 1 | (574) |
Profit/(loss) before taxation | (78) | 843 | 22 | (516) | (740) | (469) |
Taxation | (20) | |||||
Loss for the period | (489) | |||||
Concrete | Elimination of inter-segment | |||||
Construction | Property | Residential | Pumping | items | Group Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Assets and liabilities | ||||||
Segment assets | 20,961 | 60,815 | 5,078 | 3,969 | (11,068) | 79,755 |
Investment in equity accounted joint ventures and associates | - | 5,931 | - | - | - | 5,931 |
Total assets | 20,961 | 66,746 | 5,078 | 3,969 | (11,068) | 85,686 |
Segment liabilities | 15,441 | 49,334 | 2,576 | 3,827 | (11,068) | 60,110 |
Net assets | 5,520 | 17,412 | 2,502 | 142 | - | 25,576 |
Other information | ||||||
Capital expenditure | 19 | - | - | 561 | - | 580 |
Depreciation | 34 | 36 | - | 58 | - | 128 |
Provision against investment in joint ventures and other investments | - | - | - | - | - | - |
Impairment of inventories | - | 498 | - | - | - | 498 |
6 months ended 30 November 2009
Concrete | Group | Group | |||||
Construction | Property | Residential | Pumping | Management | Total | ||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
Revenue | |||||||
External sales | 38,775 | 1,225 | 2,513 | 4,989 | - | 47,502 | |
Inter-segment sales | 387 | - | - | 66 | - | 453 | |
Eliminations | (387) | - | - | (66) | - | (453) | |
Total revenue | 38,775 | 1,225 | 2,513 | 4,989 | - | 47,502 | |
Segment result | |||||||
Operating profit/(loss) | 906 | (3,540) | (168) | (773) | (373) | (3,948) | |
Share of results of joint ventures and associates | -
| (346)
| -
| -
| -
| (346)
| |
Net finance cost | (18) | (42) | - | (17) | (3) | (80) | |
Profit/(loss) before taxation | 888 | (3,928) | (168) | (790) | (376) | (4,374) | |
Taxation | 1,300 | ||||||
Loss for the period | (3,074) | ||||||
| Elimination | ||||||
Concrete | of inter-segment | ||||||
Construction | Property | Residential | Pumping | items | Group Total | ||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
Assets and liabilities | |||||||
Segment assets | 24,411 | 77,144 | 865 | 6,665 | (24,416) | 84,669 | |
Investment in equity accounted joint ventures and associates | - | 12,437 | - | - | - | 12,437 | |
Total assets | 24,411 | 89,581 | 865 | 6,665 | (24,416) | 97,106 | |
Segment liabilities | 18,929 | 61,954 | 3,748 | 3,232 | (24,416) | 63,447 | |
Net assets/(liabilities) | 5,482 | 27,627 | (2,883) | 3,433 | - | 33,659 | |
Other information | |||||||
Capital expenditure | - | - | - | - | - | - | |
Depreciation | 48 | 36 | - | 22 | - | 106 | |
Provision against investment in joint ventures and other investments |
- |
4,230
|
- |
- |
- |
4,230
| |
Impairment of inventories | - | - | - | - | - | - | |
Segmental information
12 months ended 31 May 2010
Concrete | Group | Group | ||||
Construction | Property | Residential | Pumping | Management | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Revenue | ||||||
External sales | 60,999 | 1,230 | 3,496 | 9,094 | - | 74,819 |
Inter-segment sales | 554 | - | - | 73 | - | 627 |
Eliminations | (554) | - | - | (73) | - | (627) |
Total revenue | 60,999 | 1,230 | 3,496 | 9,094 | - | 74,819 |
Segment result | ||||||
Operating profit/(loss) | 730 | (7,795) | (3,298) | (2,826) | (1,030) | (14,219) |
Share of results of joint ventures and associates |
- |
(1,827) |
- |
- |
- |
(1,827) |
Net finance income | (39) | (116) | - | (25) | (6) | (186) |
Profit/(loss) before taxation | 691 | (9,738) | (3,298) | (2,851) | (1,036) | (16,232) |
Taxation | 724 | |||||
Loss for the period | (15,508) | |||||
Elimination | ||||||
Concrete | of inter-segment | |||||
Construction | Property | Residential | Pumping | items | Group Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Assets and liabilities | ||||||
Segment assets | 21,778 | 59,556 | 6,036 | 4,624 | (10,952) | 81,042 |
Investment in equity accounted joint ventures and associates | ||||||
- | 10,888 | - | - | - | 10,888 | |
Total assets | 21,778 | 70,444 | 6,036 | 4,624 | (10,952) | 91,930 |
Segment liabilities | 16,085 | 54,303 | 3,556 | 3,026 | (10,952) | 66,018 |
Net assets | 5,693 | 16,141 | 2,480 | 1,598 | - | 25,912 |
Other information | ||||||
Capital expenditure | 13 | - | - | 32 | - | 45 |
Depreciation | 89 | 71 | - | 49 | - | 209 |
Provision against investment in joint ventures and other investments |
- |
5,213 |
- |
- |
- |
5,213 |
Impairment of inventories | - | 691 | 2,858 | - | - | 3,549 |
4 Taxation
The taxation charge is calculated by applying the estimated effective annual tax rate to the profit for the period.
5. Dividends
The directors are not proposing an interim dividend in respect of the financial period ending 30 November 2010.
6. Earnings per share
The calculation of earnings per share (basic and diluted) is based on group loss after taxation and minority interests of £508,000 (2009: £3,092,000 loss) and the 20,800,000 ordinary shares of 25p in issue at 30 November 2010 and 30 November 2009.
The number of shares in the calculation has been reduced at 30 November 2010 for the 440,500 (2009: 438,000) shares held in the Employee Share Trust. Basic earnings per share is -2.5p (2009: -15.2p). The assumed conversion of dilutive options has no impact on the number of shares and so diluted earnings per share is equal to basic earnings per share.
6 months ended 30 November 2010 | |||
Weighted average | |||
Earnings | no. of shares | Per share | |
£'000 | '000 | p | |
Basic EPS | 508 | 20,360 | (2.5) |
Effect of share options | - | - | - |
Diluted EPS | 508 | 20,360 | (2.5) |
6 months ended 30 November 2009 | |||
Weighted average | |||
Earnings | no. of shares | Per share | |
£'000 | '000 | p | |
Basic EPS | (3,092) | 20,362 | (15.2) |
Effect of share options | - | - | - |
Diluted EPS | (3,092) | 20,362 | (15.2) |
12 months ended 31 May 2010 | |||
Weighted average | |||
Earnings | no. of shares | Per share | |
£'000 | '000 | p | |
Basic EPS | (15,545) | 20,360 | (76.4) |
Effect of share options | - | - | - |
Diluted EPS | (15,545) | 20,360 | (76.4) |
7. The comparative figures for the year ended 31 May 2010 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 2010, which were prepared under International Financial Reporting Standards and which the auditors gave an unqualified report in accordance with section 235 of the Companies Act 1985, have been filed with the Registrar of Companies.
8. This interim report is available on the Group's website (www.pochins.plc.uk).
Related Shares:
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