Interim Announcement

RNS Number : 5727H

Gleeson(M J)Group PLC

24 February 2010

 

24 February 2010

 

MJ GLEESON GROUP PLC - INTERIM ANNOUNCEMENT

 

Gleeson (GLE.L), the urban regeneration and strategic land specialist, announces its results for the six months to 31 December 2009.

 

Key Points - Financial

 

·; Revenue from continuing operations increased by 17% to £36.0m (2008: £30.6m)

·; A pre-tax profit on continuing operations of £0.3m (2008: loss £23.7m) was made

·; Net cash increased in the period by £9.5m to £20.4m and today stands at £28.1m

·; Concluding that the Group has excess cash, the Board has decided to pay a special dividend per

share of 15p

 

Key Points - Commercial

 

·; Gleeson Regeneration & Homes made an operating loss of £1.5m (2008: loss of £11.7m) on the sale of 101 (2008: 150) units, down 33%, at an average selling price of £134,000 (2008: £101,000), up 33%

·; Like-for-like sales showed a modest increase in price; the increase in average selling price was primarily a result of a change in the mix of product sold

·; Gleeson Strategic Land made an operating profit of £2.4m (2008: loss of £3.0m) on the sale of two land sales (2008: nil), generating revenue of £9.8m (2008: £nil), and increased its portfolio of options to 3,858 (2008: 3,793) acres

·; Powerminster Gleeson Services' operating profit slightly decreased to £0.2m (2008: £0.3m), but the order book increased to £163m (2008: £158m)

·; The Group continued the run-off of Gleeson Commercial Property Developments with property disposals in the period generating revenue of £3.6m. Subsequent to the period end, the Group completed the sale of its last two remaining commercial property developments.

·; Group overheads further reduced to £1.1m (2008: £2.7m)

 

Current Trading and Prospects

 

Dermot Gleeson, Chairman, stated: "Although very limited in scale, there have been signs of a modest improvement in house buyer interest since the year end and Gleeson Regeneration & Homes is now seeking selectively to acquire new low cost development sites in areas in the North of England where there are opportunities to take advantage of much reduced land values. Gleeson Strategic Land completed two profitable land sales in the South of England.

 

It is still too early to be confident that the modest improvement in the housing market referred to above heralds a sustained recovery. However, the Group continues to have a strong balance sheet and costs across the Group have been substantially reduced without compromising the quality and effectiveness of the Group's skill base. Accordingly, the Group is well-placed to withstand, if necessary, a prolonged further period of weak demand and to resume profitable growth once confidence and liquidity return to the market."

 

 

CHAIRMAN'S STATEMENT

 

Market and Business Overview

 

In the 2009 Report & Accounts, I commented that there had been signs of a modest improvement in house buyer interest since the year end. Although very limited in scale, this improvement has, broadly speaking, been maintained and Gleeson Regeneration & Homes is now seeking selectively to acquire new low cost development sites in areas in the North of England where there are opportunities to take advantage of much reduced land values. We are continuing to reduce build costs and to review our house designs in order to make our new homes more affordable. 

 

During the period, Gleeson Strategic Land completed two profitable land sales in the South of England.

 

Continuing restrictions on mortgage availability, particularly for first time buyers, combined with the widespread uncertainty surrounding employment prospects, mean that, by historical standards, housing demand is likely to remain subdued for some time. However, housing need in the United Kingdom is high and forecast to grow. The Board therefore remains convinced that, in the medium to long term, the housing market will return to higher levels of activity than we are currently witnessing. When this happens, the Group's contracted pipeline of regeneration projects and its strategic land bank will provide opportunities for substantial growth.

 

Results

 

Revenue from continuing operations increased by 17.6% to £36.0m (2008: £30.6m). Revenue from Gleeson Regeneration & Homes decreased due to a reduction in the number of units sold, notwithstanding the increase in unit selling price. Gleeson Strategic Land recorded revenue of £9.8m (2008: £nil) resulting from two land sales in the period (2008: Nil). Revenue from Powerminster Gleeson Services at £8.9m was £0.5m lower than in the comparable period last year. Revenue from Gleeson Commercial Property Developments, in the latter stages of its run-off, increased to £3.6m (2008: £1.5m).

 

The Group's continuing operations recorded a pre-tax profit of £0.3m (2008: loss £23.7m). 

 

Discontinued operations recorded a post-tax loss of £47k (2008: profit £0.1m).

 

Operational Review

 

Gleeson Regeneration & Homes

 

An operating loss of £1.5m (2008: loss £11.7m) was recorded for the period. The prior year loss included £8.4m of exceptional costs relating to the write down of land and work in progress and £0.5m of restructuring costs; the Group did not make any further provision for write downs of land and work in progress in the period.

 

Gleeson Regeneration & Homes recorded units for revenue purposes totalling 101 (2008: 150) at an average selling price of £134,000 (2008: £101,000). Like-for-like sales showed a modest increase in price; the increase in average selling price was primarily a result of a change in the mix of product sold. Of the units sold, 29 (2008: 54) were sales to Registered Social Landlords ("RSLs"). The prior period included a bulk sale of units to an investor; excluding this, the trend of unit sales to private purchasers was upward.

 

Gleeson Strategic Land

 

An operating profit of £2.4m (2008: loss £3.0m) was recorded for the period as a result of Gleeson Strategic Land concluding two land transactions (2008: nil) involving the sale of 22 acres of land. The prior year loss included £2.6m of exceptional costs relating to the write down of land and work in progress.

 

During the period, amended planning approval was achieved on a 73 unit scheme, making it ready for disposal and a promotional agreement was entered into on a 30 acre site.

 

At 31 December 2009, the Group had 3,858 (2008: 3,793) acres held under 68 (2008: 69) option /development agreements or freeholds.

 

Gleeson Capital Solutions

 

An operating profit of £0.3m (2008: loss £0.5m) was recorded for the period.

 

The business unit remains prominent within its targeted market place and has been shortlisted as one of two bidders for a social housing PFI project in the North of England. If successful, this will deliver equity returns to Gleeson Capital Solutions, provide Gleeson Regeneration & Homes with a significant housing development opportunity and secure for Powerminster Gleeson Services a long-term facilities management contract.

 

At 31 December 2009, the business unit retained investments in five PFI projects.

 

Powerminster Gleeson Services

 

An operating profit of £0.2m (2008: £0.3m) was recorded for the period. Competition in the facilities management and maintenance markets has continued to intensify; nonetheless, Powerminster Gleeson Services' order book at 31 December 2009 increased to £163m (2008: £158m) and the business continues to generate a positive cash flow.

 

Group Overheads

 

Group overheads totalled £1.1m (2008: £2.7m) for the period. The prior year included £0.6m of exceptional costs relating to redundancies and provisions relating to rented properties that are now surplus to requirements. Costs continue to be tightly controlled and the current forecast for overhead costs for the year to June 2010 is approximately £2.1m.

 

Gleeson Commercial Property Developments

 

Although the results of this business are included within operating profit, it is in run-off, as announced in March 2007.

 

An operating loss of £0.1m (2008: loss £6.3m) was recorded for the period. During the period, three commercial property developments and the retail lease at the Barnes development were sold, generating aggregate revenue of £3.6m. Subsequent to the period end, the Group completed the sale of its last two remaining commercial property developments.

 

Gleeson Construction Services

 

The Group sold certain contracts, assets and liabilities of Gleeson Building Contracting Division to Gleeson Building Limited (now re-named GB Building Solutions Limited) in 2005. Any financial results arising from contracts, assets and liabilities retained by the Group are recorded within operating profit. A pre-tax loss of £46k was recorded for the period (2008: loss £0.1m).

 

The Group sold certain contracts, assets and liabilities of Gleeson Engineering Division to Black & Veatch Ltd in 2006. Any financial results arising from contracts, assets and liabilities retained by the Group are treated as a Discontinued Operation. A post-tax loss of £47k was recorded for the period (2008: profit £0.1m).

 

Balance Sheet, Cash Flow and Banking Facilities

 

Total shareholders' equity stood at £103.8m at 31 December 2009 compared to £103.4m at 30 June 2009. This equates to net assets per share of 197.4p and 196.5p, respectively.

 

The Group's net cash balance at 31 December 2009 was £20.4m, a net cash inflow of £9.5m in the period. Subsequent to the period end, the Group's net cash balance has further increased by £7.7m to £28.1m.

 

The Group has reviewed the need for continuing with its banking facilities, which expire on 26 June 2010, and concluded that it has no further requirement for them. Accordingly, these facilities will be terminated prior to their expiry date.

 

Special Dividend

 

Alongside the review of its banking facilities, the Group has reviewed its short and long term cash needs and concluded that the Group has cash in excess of its requirements. Accordingly, the Board has decided to pay a special dividend of 15p a share to shareholders on the register at the close of business on 5 March 2010. This special dividend, whose total cost is £8.0m, will be paid on 31 March 2010.

 

Risks and Uncertainties

 

The principal risks and uncertainties that have been identified as being capable of affecting the Group's performance in the second half are set out below:

 

Housing Demand 

 

Security of employment, interest rates and mortgage availability are the key determinants of house buyers' confidence. With both the UK and global economies remaining fragile, and with a General Election to be held during the period, employment prospects remain uncertain. Although interest rates remain at a low level, mortgage finance remains scarce, particularly for high loan-to-value mortgages. To minimise cash outflows in this difficult environment, the Group continues to build to demand in a strictly controlled manner.

 

Planning consents 

 

The Group derives profit from the sale to other developers of land which it acquires through the exercise of option agreements when it succeeds in obtaining appropriate planning consents. Although the demand for consented land has recently increased, it is difficult to predict with any precision the date by which planning consents can be obtained.

 

Prospects

 

It is still too early to be confident that the modest improvement in the housing market referred to above heralds a sustained recovery. However, the Group continues to have a strong balance sheet and costs across the Group have been substantially reduced without compromising the quality and effectiveness of the Group's skill base. Accordingly, the Group is well-placed to withstand, if necessary, a prolonged further period of weak demand and to resume profitable growth once confidence and liquidity return to the market.

 

 

Dermot Gleeson

Chairman

 

 

Consolidated Income Statement
for the six months to 31 December 2009
	Unaudited	Unaudited	Audited
	Six months to 31 December 2009	Six months to 31 December 2008	Year to  30 June 2009
	£000	£000	£000
Continuing operations
Revenue	35,971	30,588	54,999
Cost of sales	(31,321)	(44,720)	(89,552)
Gross profit/(loss)	4,650	(14,132)	(34,553)
Administrative expenses	(4,862)	(10,299)	(21,444)
Profit on sale of investment properties	15	208	340
Valuation losses on investment properties	-	(59)	-
Share of profit of joint ventures (net of tax)	312	228	498
Operating profit/(loss)	115	(24,054)	(55,159)
Financial income	338	642	1,444
Financial expenses	(128)	(295)	(576)
Profit/(loss) before tax	325	(23,707)	(54,291)
Tax	-	168	(2,652)
Profit/(loss) for the period from continuing operations	325	(23,539)	(56,943)
Discontinued operations
(Loss)/profit for the period from discontinued operations (net of tax)	(47)	87	920
Profit/(loss) for the period attributable to equity holders of the parent company	278	(23,452)	(56,023)
Profit/(loss) per share attributable to equity holders of parent company
Basic and diluted	0.53	(44.81)	(107.48)
Profit/(loss) per share from continuing operations
Basic and diluted	0.62	(44.98)	(109.25)

 

Consolidated Balance Sheet
as at 31 December 2009
	Unaudited	Unaudited	Audited
	31 December 2009	31 December 2008	30 June  2009
	£000	£000	£000
Non-current assets
Property, plant and equipment	1,684	1,740	1,650
Investment property	1,033	2,941	1,140
Investments in joint ventures	2,184	3,277	1,888
Loans and other investments	13,428	14,994	14,582
Trade and other receivables	7,376	10,620	1,962
Deferred tax assets	852	3,711	862
	26,557	37,283	22,084
Current assets
Inventories	40,556	77,359	50,080
Trade and other receivables	54,405	61,838	57,911
UK corporation tax	-	1,893	2
Cash and cash equivalents	20,400	7,078	10,926
	115,361	148,168	118,919
Total assets	141,918	185,451	141,003
Non-current liabilities
Provisions	(3,347)	(4,400)	(3,803)
Deferred tax liabilities	(291)	(328)	(291)
	(3,638)	(4,728)	(4,094)
Current liabilities
Trade and other payables	(33,151)	(42,390)	(31,914)
Provisions	(1,313)	(2,401)	(1,624)
UK corporation tax	(6)	-	(5)
	(34,470)	(44,791)	(33,543)
Total liabilities	(38,108)	(49,519)	(37,637)
Net assets	103,810	135,932	103,366
Equity
Called up share capital	1,054	1,050	1,052
Share premium account	5,942	5,793	5,861
Capital redemption reserve	120	120	120
Retained earnings	96,694	128,969	96,333
Total equity	103,810	135,932	103,366

 

Consolidated Cash Flow Statement
For the six months to 31 December 2009
	Unaudited	Unaudited	Audited
	Six months to 31 December 2009	Six months to 31 December 2008	Year to  30 June  2009
	£000	£000	£000
Operating activities
Profit/(loss) before tax from continuing operations	325	(23,707)	(54,291)
(Loss)/profit before tax from discontinued operations	(47)	87	(4)
	278	(23,620)	(54,295)
Depreciation of property, plant and equipment	125	135	289
Share-based payments	152	116	56
Profit on sale of investment properties	(15)	(208)	(340)
Profit on sale of other property, plant and equipment	-	(31)	(22)
Impairment of loans to joint ventures	-	5,165	5,950
Valuation loss on investment properties	-	59	-
Share of profit of joint ventures (net of tax)	(312)	(228)	(498)
New ground rents capitalised	-	-	(3)
Financial income	(338)	(805)	(1,628)
Financial expenses	128	295	576
Operating cash flows before movements in working capital	18	(19,122)	(49,915)
Decrease in inventories	9,524	4,308	31,587
(Increase)/decrease in receivables	(1,904)	5,183	19,753
Decrease/(increase) in payables	472	(9,657)	(21,798)
Cash generated by/(utilised in) operating activities	8,110	(19,288)	(20,373)
Tax received	-	583	3,398
Interest paid	(118)	(399)	(490)
Net cash flows from operating activities	7,992	(19,104)	(17,465)

 

 

Consolidated Cash Flow Statement (continued)
For the six months to 31 December 2009
	Unaudited		Unaudited	Audited
	Six months to 31 December 2009		Six months to 31 December 2008	Year to  30 June 2009
	£000		£000	£000
Investing activities
Proceeds from disposal of investments in joint ventures	-		-	1,659
Proceeds from disposal of investments	121		2,166	2,492
Proceeds from disposal of other property, plant and equipment	-		31	42
Interest received	252		444	910
Purchase of property, plant and equipment	(160)		(145)	(84)
Net increase in loans to joint ventures and other investments	1,239		1,550	1,403
Net cash flows from investing activities	1,452		4,046	6,422
Financing activities
Proceeds from issue of shares	82		184	255
Purchase of own shares	(52)		-	(161)
Own shares disposed	-		77	-
Net cash flows from financing activities	30		261	94
Net increase/(decrease) in cash and cash equivalents	9,474		(14,797)	(10,949)
Cash and cash equivalents at beginning of period	10,926		21,875	21,875
Cash and cash equivalents at end of period	20,400		7,078	10,926

 

 

Statement of Changes in Equity
	Share capital	Share premium account	Capital redemption reserve	Retained earnings	Total
	£000	£000	£000	£000	£000
At 1 July 2008	1,047	5,611	120	152,461	159,239
Share issue	3	182	-	-	185
Purchase of own shares	-	-	-	(156)	(156)
Share-based payments	-	-	-	116	116
Loss for the period	-	-	-	(23,452)	(23,452)
At 31 December 2008	1,050	5,793	120	128,969	135,932
Share issue	2	68	-	-	70
Purchase of own shares	-	-	-	(5)	(5)
Share-based payments	-	-	-	(60)	(60)
Loss for the period	-	-	-	(32,571)	(32,571)
At 30 June 2009	1,052	5,861	120	96,333	103,366
Share issue	2	81	-	-	83
Purchase of own shares	-	-	-	(52)	(52)
Share-based payments	-	-	-	152	152
Loss on hedge of net investment in joint venture	-	-	-	(17)	(17)
Profit for the period	-	-	-	278	278
At 31 December 2009	1,054	5,942	120	96,694	103,810

 

Notes To The Financial Statements

 

1. Basis of preparation

 

The consolidated Interim Report of the Group for the six months ended 31 December 2009 has been prepared in accordance with IAS 34 "Interim Financial Reporting" and International Financial Reporting Standards ('IFRS') as adopted for use in the European Union ('EU') and in accordance with the Disclosure and Transparency Rules of the Financial Services Authority.

 

The half year report does not constitute financial statements as defined in Section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for full annual statements. It should be read in conjunction with the annual report and financial statements for the year ended 30 June 2009 which is available either on request from the Group's registered office, Integration House, Rye Close, Ancells Business Park, Fleet, Hampshire, GU51 2QG or can be downloaded from the corporate website www.mjgleeson.com.

 

The comparative figures for the financial year ended 30 June 2009 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters which the auditors drew attention to by way of emphasis without qualifying their report and (iii) did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.

 

This Interim Report was approved for issue by the Board of Directors on 23 February 2010.

 

 

2. Accounting policies

 

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2009, as described in those financial statements. IFRS 8, Operating Segments has been adopted in the financial year and the disclosure is as shown in note 4.

 

 

3. Responsibility statement

 

The Directors confirm that this consolidated Interim Report has been prepared in accordance with IAS34 and that the Chairman's Statement and the notes to the financial statements herein includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year) and DTR 4.2.8R (disclosure of related party transactions and changes therein).

 

 

4. Segmental Analysis
	Unaudited	Unaudited	Audited
	Six months to 31 December 2009	Six months to 31 December 2008	Year to  30 June 2009
	£000	£000	£000
Revenue
Continuing activities:
Gleeson Regeneration & Homes	13,574	19,601	33,103
Gleeson Strategic Land	9,832	-	1,066
Gleeson Capital Solutions	-	30	30
Powerminster Gleeson Services	8,925	9,426	18,681
Gleeson Commercial Property Developments	3,573	1,531	2,086
Gleeson Construction Services	67	-	33
	35,971	30,588	54,999
Discontinued activities:
Gleeson Construction Services	196	2,225	3,828
Total revenue	36,167	32,813	58,827
Profit/(loss) on activities
Gleeson Regeneration & Homes	(1,493)	(11,678)	(37,824)
Gleeson Strategic Land	2,379	(2,994)	(5,904)
Gleeson Capital Solutions	298	(528)	(614)
Powerminster Gleeson Services	229	282	967
Gleeson Commercial Property Developments	(105)	(6,304)	(8,028)
Gleeson Construction Services	(46)	(83)	(142)
Group Activities	(1,147)	(2,749)	(3,614)
Operating profit/(loss)	115	(24,054)	(55,159)
Financial income	338	642	1,444
Financial expenses	(128)	(295)	(576)
Profit/(loss) before tax	325	(23,707)	(54,291)
Tax	-	168	(2,652)
Profit/(loss) for the period from continuing operations	325	(23,539)	(56,943)
(Loss)/profit for the period from discontinued operations (net of tax)	(47)	87	920
Profit/(loss) for the period attributable to equity holders of the parent company	278	(23,452)	(56,023)

 

5. Exceptional costs

 

Impairment of inventories and contract provisions

During the 6 months to 31 December 2009, the Group conducted a review of the net realisable value of the land and work in progress carrying values of its sites. The estimated future net present realisable value of the sites at 31 December 2009 is considered to equal their carrying value within the balance sheet and therefore no impairment has been recognised in the period.

 

Impairment of amounts due from construction contracts

During the 6 months to 31 December 2009, the Group conducted a review of the net realisable value of amounts due from construction contracts. The estimated future net present realisable value of amounts due at 31 December 2009 is considered to equal their carrying value within the balance sheet and therefore no impairment has been recognised in the period.

 

Impairment of loans to joint ventures

During the 6 months to 31 December 2009, the Group conducted a review of the net realisable value of loans to joint ventures. The estimated future net present value of the property held within the joint ventures at 31 December 2009 is considered to equal the carrying value of the loans within the balance sheet and therefore no impairment has been recognised in the period.

 

Restructuring costs

In previous periods the Group incurred costs in relation to reorganising and restructuring the business, including redundancy costs where existing employees could not be retained within the Group. No such costs were incurred in the 6 months to 31 December 2009.

 

These exceptional costs may be summarised as follows:

 

	Unaudited	Unaudited	Audited
	Six months to 31 December 2009	Six months to 31 December 2008	Year to  30 June 2009
	£000	£000	£000
Impairment of inventories and contract provisions	-	(9,805)	(33,917)
Impairment of amounts due from construction contracts	-	(1,771)	(4,741)
Impairment of loans to joint ventures	-	(5,165)	(5,950)
Restructuring costs	-	(1,586)	(1,391)
	-	(18,327)	(45,999)

 

5. Exceptional costs (continued)

 

Exceptional costs by income statement category:

 

	Unaudited	Unaudited	Audited
	Six months to 31 December 2009	Six months to 31 December 2008	Year to  30 June 2009
	£000	£000	£000
Continuing operations
Revenue	-	-	(4,741)
Cost of sales	-	(16,741)	(33,917)
Gross profit/(loss)	-	(16,741)	(38,658)
Administrative expenses	-	(1,586)	(7,341)
Operating profit/(loss)	-	(18,327)	(45,999)
Financial income	-	-	-
Financial expenses	-	-	-
Profit/(loss) before tax	-	(18,327)	(45,999)
Tax	-	-	-
Profit/(loss) for the period from continuing operations	-	(18,327)	(45,999)
Discontinued operations
(Loss)/profit for the period from discontinued operations (net of tax)	-	-	-
Profit/(loss) for the period attributable to equity holders of the parent company	-	(18,327)	(45,999)

 

6. Discontinued operations

 

The Group disposed of certain assets and liabilities of the Gleeson Engineering Division of Gleeson Construction Services to Black and Veatch Limited ("B&V") in a prior period and treated this as a Discontinued Operation. A small number of contracts were legally retained but the operations were taken over by B&V on the Group's behalf on a cost plus basis. Consequently, the Group has no involvement in the day to day running of these contracts and acts as an intermediary. At the time of the sale, the remaining costs to complete the contracts were considered insignificant in relation to the separately identifiable division as a whole.

 

	Unaudited	Unaudited	Audited
	Six months to  31 December 2009	Six months to  31 December 2008	Year to  30 June 2009
	£000	£000	£000
Revenue	196	2,225	3,828
Cost of sales	(196)	(2,216)	(3,795)
Gross profit	-	9	33
Administrative expenses	(47)	(85)	(221)
Operating loss	(47)	(76)	(188)
Financial income	-	163	184
(Loss)/profit before tax	(47)	87	(4)
Tax	-	-	924
(Loss)/profit for the period from discontinued operations	(47)	87	920

 

7. Earnings per share

 

From continuing and discontinued operations

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

Earnings	Unaudited	Unaudited	Audited
	Six months to 31 December 2009	Six months to  31 December 2008	Year to 30 June 2009
	£000	£000	£000
Earnings for the purposes of basic earnings per share, being net profit/(loss) attributable to equity holders of the parent company
Profit/(loss) from continuing operations	325	(23,539)	(56,943)
(Loss)/profit from discontinued operations	(47)	87	920
Earnings for the purposes of basic and diluted earnings per share	278	(23,452)	(56,023)
Number of shares	2009	2008	2009
	No. 000	No. 000	No. 000
Weighted average number of ordinary shares for the purposes of basic earnings per share	52,248	52,334	52,126
Effect of dilutive potential ordinary shares:
Share options	-	-	-
Weighted average number of ordinary shares for the purposes of diluted earnings per share	52,248	52,334	52,126
From continuing operations	2009	2008	2009
	p	p	p
Basic and diluted	0.62	(44.98)	(109.25)
From discontinued operations	2009	2008	2009
	p	p	p
Basic and diluted	(0.09)	0.17	1.76
From continuing and discontinued operations	2009	2008	2009
	p	p	p
Basic and diluted	0.53	(44.81)	(107.48)

8. Related party transactions

 

Identity of related parties

 

The Group has a related party relationship with its joint ventures and key management personnel.

 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

 

 

Provision of goods and services to joint ventures

 

		Unaudited	Unaudited	Audited
		Six months to 31 December 2009	Six months to 31 December 2008	Year to 30 June 2009
		£000	£000	£000
Gleeson Capital Solutions		262	493	527
		262	493	527

 

Sales to related parties were made at market rates.

 

Amounts owed by and owed to joint ventures are analysed below:

 

The amounts owed by joint ventures at 31 December 2009 totalled £33,398,000 (31 December 2008:£25,039,000; 30 June 2009: £21,867,000)

 

No amounts were owed to joint ventures at 31 December 2009 (31 December 2008: £nil; 30 June 2009: £nil)

 

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of amounts owed by related parties.

 

Group Pension Scheme

 

The Group operates a defined contribution pension plan. The assets of the pension plan are held separately from those of the Group in funds under the control of the trustees. During the 6 months to 31 December 2009 the defined contribution pension plan was closed and members were invited to join a new stakeholder scheme established by the Group.

 

The total pension cost charged to the income statement in the 6 months to 31 December 2009 was £206,000 (6 months to 31 December 2008: £335,000; year to 30 June 2009: £660,000) Contributions paid to the defined contribution pension plan, prior to its closure, were £99,000 with £107,000 being paid to the new stakeholder scheme thereafter.

 

At 31 December 2009, contributions of £53,000 (31 December 2008: £65,000; 30 June 2009: £47,000) due in respect of the current reporting period had not been paid over to the pension plan. Since the period end, this amount has been paid.

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