26th Jan 2010 07:00
Pochin's PLC
Interim Report
30 November 2009
Headlines
Revenue £47.5m (2008: £49.9m)
Loss before tax £4.4m after Property related impairments £4.23m (2008: £0.6m profit)
Net assets reduced to £33.7m (2008: £48.6m)
Net debt down £1.6m in the period to £26.8m (2008: £37.3m)
Chairman's Statement
The results for the 6 months ended 30 November 2009 show a loss before tax of £4.374m after property related impairments of £4.23m (2008: profit £0.574m) on turnover of £47.5m (2008: £49.9m). No interim dividend is declared (2008:1.5p).
Subdued levels of construction activity and weakness in the occupational market for commercial property continue to affect the Group's performance.
In this context it is good to report that the construction division has performed well during the period. In particular, large projects at Widnes, Cheshire and at Chester have achieved satisfactory completions. No improvement in the concrete pumping market can be reported and the Group continues to sustain damaging losses from this activity. In the small residential division, the Group continues to realise its investment in both built houses and housing land. The recent exceptional weather conditions have exacerbated the weakness in construction activity such that the Group's trading divisions are unlikely to show an improvement in the second half of the year.
Values of commercial property have stabilized and the recent rise in the Investment Property Databank UK Monthly Index is encouraging. The Group's rental income from its core portfolio has increased during the period and this wholly owned property has proved resilient. In the Group's joint ventures the performance is less satisfactory. A re-assessment of value of one of the large jointly-held development sites has been necessary and, in another location, Pochin's is being required to support a joint venture where continuing voids in a completed development are proving painfully persistent.
Write-downs associated with the joint ventures referred to above account for almost all of the loss reported for the period. Group costs remain under tight control with further reductions in overheads being delivered. Net borrowings have fallen during the period.
After such a dramatic collapse in the values of commercial property combined with the well publicised contraction in available credit for the industry, it is difficult to forecast an early return to the levels of development and construction activity of two years ago. Nevertheless, some improvement is perceptible and Pochin's remains well placed to benefit from it.
Richard Fildes
Chairman
Enquiries:
Pochin's PLC
John Moss, 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 2009 |
30 November 2008 |
31 May 2009 |
||
|
Notes |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Revenue |
3 |
47,502 |
49,935 |
101,961 |
|
Cost of sales |
(44,507) |
(43,382) |
(94,247) |
|
|
Gross profit |
2,995 |
6,553 |
7,714 |
|
|
Operating expenses |
(8,196) |
(5,676) |
(14,349) |
|
|
Other operating income |
1,253 |
1,915 |
2,719 |
|
|
Losses on revaluation of investment properties |
- |
(2,000) |
(3,219) |
|
|
Operating profit |
(3,948) |
792 |
(7,135) |
|
|
Share of loss after taxation in joint ventures |
(557) |
(365) |
(2,962) |
|
|
Share of (loss)/profit after taxation in associates |
211 |
14 |
(149) |
|
|
Finance income |
1,041 |
1,563 |
2,815 |
|
|
Finance cost |
(1,121) |
(1,430) |
(1,948) |
|
|
(Loss)/Profit before taxation |
3 |
(4,374) |
574 |
(9,379) |
|
Taxation |
1,300 |
(255) |
662 |
|
|
(Loss)/Profit for the period |
(3,074) |
319 |
(8,717) |
|
|
Attributable to: |
||||
|
Equity holders of the company |
(3,092) |
303 |
(8,749) |
|
|
Minority interest |
18 |
16 |
32 |
|
|
(3,074) |
319 |
(8,717) |
||
|
Earnings per share (basic) |
6 |
(15.2)p |
1.5p |
(43.0)p |
|
Earnings per share (diluted) |
6 |
(15.2)p |
1.5p |
(43.0)p |
|
Dividends proposed for the period |
5 |
- |
1.5p |
- |
Consolidated statement of recognised income and expense
|
6 months ended |
6 months ended |
12 months ended |
||
|
30 November 2009 |
30 November 2008 |
31 May 2009 |
||
|
£'000 |
£'000 |
£'000 |
||
|
|
|
|||
|
Actuarial losses on defined benefit pension scheme |
(1,443) |
(1,530) |
(3,675) |
|
|
Deferred taxation on pension scheme deficit |
404 |
428 |
1,028 |
|
|
Cashflow hedging |
||||
|
Current year fair value movement |
(718) |
- |
(2,050) |
|
|
Reclassification to profit or loss |
- |
- |
(470) |
|
|
Deferred taxation on cashflow hedging |
||||
|
Group |
(28) |
- |
277 |
|
|
Joint Ventures |
229 |
- |
428 |
|
|
Net expense recognised directly in equity |
(1,556) |
(1,102) |
(4,462) |
|
|
(Loss)/Profit for the financial period |
(3,074) |
319 |
(8,717) |
|
|
Total losses recognised since last period |
(4,630) |
(783) |
(13,179) |
|
|
Attributable to: |
||||
|
Equity holders of the company |
(4,648) |
(799) |
(13,211) |
|
|
Minority interest |
18 |
16 |
32 |
|
|
(4,630) |
(783) |
(13,179) |
||
Consolidated Balance Sheet
|
As at |
As at |
As at |
||
|
30 November |
30 November |
31 May |
||
|
2009 |
2008 |
2009 |
||
|
Notes |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Non current assets |
||||
|
Property, plant and equipment |
2,779 |
3,132 |
2,929 |
|
|
Investment properties |
25,917 |
44,167 |
25,917 |
|
|
Investments |
||||
|
Joint ventures |
9,840 |
17,547 |
13,782 |
|
|
Associates |
2,597 |
2,789 |
2,626 |
|
|
Available for sale |
2,730 |
2,507 |
2,730 |
|
|
15,167 |
22,843 |
19,138 |
||
|
Deferred tax assets |
2,944 |
- |
1,284 |
|
|
Total non current assets |
46,807 |
70,142 |
49,268 |
|
|
Current assets |
||||
|
Inventories |
26,960 |
29,594 |
29,824 |
|
|
Trade and other receivables |
14,699 |
16,911 |
25,183 |
|
|
Cash and cash equivalents |
8,434 |
8,779 |
8,470 |
|
|
Corporation tax recoverable |
206 |
- |
570 |
|
|
Total current assets |
50,299 |
55,284 |
64,047 |
|
|
Current liabilities |
||||
|
Trade and other payables |
20,688 |
21,995 |
31,502 |
|
|
Corporation tax |
- |
699 |
- |
|
|
Bank loans |
13,219 |
10,504 |
15,178 |
|
|
Bank overdrafts |
21,992 |
22,961 |
21,541 |
|
|
Financial derivatives |
890 |
1,745 |
991 |
|
|
Total current liabilities |
56,789 |
57,904 |
69,212 |
|
|
Net current liabilities |
(6,490) |
(2,620) |
(5,165) |
|
|
Non current liabilities |
||||
|
Bank loans |
- |
12,578 |
104 |
|
|
Retirement benefit obligation |
3,826 |
452 |
2,441 |
|
|
Deferred tax liabilities |
- |
214 |
- |
|
|
Provisions |
91 |
482 |
481 |
|
|
Other payables |
2,741 |
5,204 |
2,741 |
|
|
Total non current liabilities |
6,658 |
18,930 |
5,767 |
|
|
Net assets |
33,659 |
48,592 |
38,336 |
|
|
Shareholders' equity |
||||
|
Share capital |
5,200 |
5,200 |
5,200 |
|
|
Own shares |
(745) |
(954) |
(745) |
|
|
Revaluation reserve |
75 |
89 |
75 |
|
|
Hedge reserve |
(3,238) |
(2,487) |
(2,520) |
|
|
Retained earnings |
32,166 |
46,540 |
36,112 |
|
|
|
|
|
||
|
Equity shareholders' funds |
33,458 |
48,388 |
38,122 |
|
|
Minority interest |
201 |
204 |
214 |
|
|
Total equity |
3 |
33,659 |
48,592 |
38,336 |
Consolidated Cash Flow Statement
|
6 months ended |
6 months ended |
12 months ended |
|||||
|
30 November 2009 |
30 November 2008 |
31 May 2009 |
|||||
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|||||||
|
Net cash from operating activities |
|||||||
|
(Loss)/profit for the period |
(3,074) |
319 |
(8,717) |
||||
|
Income tax |
(1,300) |
255 |
(662) |
||||
|
Finance income |
(1,041) |
(1,563) |
(2,815) |
||||
|
Finance cost |
1,121 |
1,430 |
1,948 |
||||
|
Share of results of joint ventures and associates |
346 |
351 |
3,111 |
||||
|
Cash flow hedge movement in joint ventures |
590 |
- |
1,391 |
||||
|
Depreciation charge |
106 |
197 |
357 |
||||
|
Charge/(credit) in respect of share based payments |
- |
20 |
(16) |
||||
|
Profit on sale of property, plant and equipment |
(14) |
(58) |
(103) |
||||
|
Losses on revaluation of investment properties |
- |
2,000 |
3,219 |
||||
|
Provision against investments in joint ventures |
3,715 |
389 |
3,315 |
||||
|
Provision against investments in available for sale investments |
515 |
- |
657 |
||||
|
Income from joint ventures and associates |
27 |
18 |
34 |
||||
|
|
|
||||||
|
Operating profit before changes in working capital |
991 |
3,358 |
1,719 |
||||
|
Decrease in inventories |
2,864 |
2,583 |
2,353 |
||||
|
Decrease/(increase) in receivables |
10,484 |
6,631 |
(1,126) |
||||
|
Decrease in payables |
(11,617) |
(7,412) |
(590) |
||||
|
|
|
||||||
|
2,722 |
5,160 |
2,356 |
|||||
|
Interest paid |
(448) |
(724) |
(544) |
||||
|
Income taxes received/(paid) |
364 |
(26) |
(240) |
||||
|
Net cash from operating activities |
2,638 |
4,410 |
1,572 |
||||
|
Investing activities |
|||||||
|
Interest received |
102 |
714 |
1,124 |
||||
|
Purchase of property, plant and equipment |
- |
- |
(17) |
||||
|
Proceeds from sale of property, plant and equipment |
58 |
342 |
441 |
||||
|
Net movement on disposal of subsidiary undertaking |
- |
- |
1,462 |
||||
|
(Increase)/decrease in interest in joint ventures and associates |
(707) |
1,106 |
(1,027) |
||||
|
Increase in interest in available for sale investments |
(515) |
(350) |
(1,230) |
||||
|
Net cash (used in)/from investing activities |
(1,062) |
1,812 |
753 |
||||
|
Financing activities |
|||||||
|
Proceeds from new loans |
- |
414 |
5,949 |
||||
|
Repayment of loans |
(2,063) |
(277) |
(499) |
||||
|
Dividends paid |
5 |
- |
(611) |
(916) |
|||
|
|
|
|
|||||
|
Net cash (used in)/from financing activities |
(2,063) |
(474) |
4,534 |
||||
|
Net (decrease)/increase in cash and cash equivalents |
(487) |
5,748 |
6,859 |
||||
|
Cash and cash equivalents at beginning of period |
(13,071) |
(19,930) |
(19,930) |
||||
|
Cash and cash equivalents at end of period |
(13,558) |
(14,182) |
(13,071) |
||||
Notes
1. The interim report was approved by the board on 25 January 2010.
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 2009.
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 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 |
||||||
|
Depreciation |
48 |
36 |
- |
22 |
- |
106 |
|
Provision against investment in joint ventures Provision against investments for sale |
- |
3,715 515 |
- |
- |
- |
3,715 515 |
Segmental information
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 (loss)/profit |
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 |
93,778 |
3,767 |
7,302 |
(23,989) |
105,090 |
|
Investment in equity accounted joint ventures and associates |
||||||
|
- |
20,336 |
- |
- |
- |
20,336 |
|
|
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
12 months ended 31 May 2009
|
Concrete |
Group |
Group |
||||
|
Construction |
Property |
Residential |
Pumping |
Management |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Revenue |
||||||
|
External sales |
79,829 |
7,418 |
3,903 |
10,811 |
- |
101,961 |
|
Inter-segment sales |
405 |
- |
- |
790 |
- |
1,195 |
|
Eliminations |
(405) |
- |
- |
(790) |
- |
(1,195) |
|
Total revenue |
79,829 |
7,418 |
3,903 |
10,811 |
- |
101,961 |
|
Segment result |
||||||
|
Operating profit/(loss) |
900 |
(1,771) |
(3,153) |
(1,505) |
(1,606) |
(7,135) |
|
Share of results of joint ventures and associates |
- |
(3,111) |
- |
- |
- |
(3,111) |
|
Net finance income |
164 |
628 |
- |
51 |
24 |
867 |
|
|
||||||
|
Profit/(loss) before taxation |
1,064 |
(4,254) |
(3,153) |
(1,454) |
(1,582) |
(9,379) |
|
Taxation |
662 |
|||||
|
Loss for the period |
(8,717) |
|||||
|
Elimination |
||||||
|
Concrete |
of inter-segment |
|||||
|
Construction |
Property |
Residential |
Pumping |
items |
Group Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Assets and liabilities |
||||||
|
Segment assets |
33,910 |
77,376 |
3,084 |
6,259 |
(23,722) |
96,907 |
|
Investment in equity accounted joint ventures and associates |
||||||
|
- |
16,408 |
- |
- |
- |
16,408 |
|
|
Total assets |
33,910 |
93,784 |
3,084 |
6,259 |
(23,722) |
113,315 |
|
Segment liabilities |
28,669 |
62,475 |
5,800 |
1,757 |
(23,722) |
74,979 |
|
Net assets/(liabilities) |
5,241 |
31,309 |
(2,716) |
4,502 |
- |
38,336 |
|
Other information |
||||||
|
Capital expenditure |
17 |
- |
- |
- |
- |
17 |
|
Depreciation |
74 |
87 |
- |
196 |
- |
357 |
|
Provision against investment in joint ventures and other investments |
- |
3,972 |
- |
- |
- |
3,972 |
|
Impairment of inventories |
- |
500 |
625 |
- |
- |
1,125 |
4 Taxation
The taxation charge is calculated by applying the estimated effective annual tax rate to the profit for the period.
5. Dividends
|
6 months ended 30 November 2009 |
6 months ended 30 November 2008 |
12 months ended 31 May 2009 |
|
|
£'000 |
£'000 |
£'000 |
|
|
Interim paid 1.5p per share |
- |
- |
305 |
|
Final paid 3.0p per share |
- |
611 |
611 |
|
- |
611 |
916 |
|
6. Earnings per share
The calculation of earnings per share (basic and diluted) is based on group profit after taxation and minority interests of £3,092,000 (2008: £303,000 profit) and the 20,800,000 ordinary shares of 25p in issue at 30 November 2009 and 30 November 2008.
The number of shares in the calculation has been reduced at 30 November 2009 for the 438,000 (2008: 445,000) shares held in the Employee Share Trust. Basic earnings per share are -15.2p (2008: 1.5p). 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 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) |
|
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 |
|
12 months ended 31 May 2009 |
|||
|
Weighted average |
|||
|
Earnings |
no. of shares |
Per share |
|
|
£'000 |
'000 |
p |
|
|
Basic EPS |
(8,749) |
20,359 |
(43.0) |
|
Effect of share options |
- |
- |
- |
|
Diluted EPS |
(8,749) |
20,359 |
(43.0) |
7. The comparative figures for the year ended 31 May 2009 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 2009, 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).
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