29th Jan 2008 07:00
Pochin's PLC29 January 2008 Pochin's PLC Interim results for the 6 months ending 30 November 2007 HIGHLIGHTS • Turnover up at £54.4m • Profit before taxation at £2.1m • Interim dividend maintained at 3.0p • Pension fund deficit eliminated • Healthy contracting order book • Improved performance from Construction Services following reorganisation Chairman's Statement Results The results for the 6 months ended 30 November 2007 show pre-tax profits of£2.1m (2006: £4.4m) on turnover of £54.4m (2006: £53.2m). The result for 2006included a pension credit of £2m. An interim dividend maintained at 3.0p (2006:3.0p) is declared. Divisional Reports Contracting Turnover for the period was ahead of last year's equivalent. The divisioncarries forward a healthy order book of £88m. A disproportionate number ofprojects will complete in the second half of the group's financial year. Whilethe modest first half loss is disappointing, the result for the year as a wholewill be more acceptable if these projects conclude according to forecast. Construction Services This division continued to perform steadily with an improved contribution to thegroup's profit. Market conditions remained favourable up to (and beyond) thehalf year. As ever, the start of the new calendar year is dependent onreasonable weather conditions. Property During the period, the commercial property market experienced a striking changein conditions. As foreshadowed in the annual statement and described in theinterim management statement released in November, there has been a markedadverse shift in property values in general, partly as a result of there-assessment of the cost and availability of credit. The volume of reportedmarket transactions has reduced significantly, and the group has suffered delaysin the completion of a number of important property disposals. As the new termsfor property lending become more perceptible, commercial property transactionsshould resume, albeit on a reduced scale. The group has increased its investment in joint venture projects. It ispleasing to report that lettings at Manchester Technopark have increasedsufficiently to create additional value which has been reflected in theseresults. Residential The general slowdown in the housing market has been well publicised, and PochinHomes is experiencing reduced levels of demand. Lower interest rates in timefor the Spring season would help stimulate this market. General Pochin comprises two trading divisions and two asset based divisions, adiversity which provides a welcome variety of cash profiles and capital growthopportunities. The abrupt change in financial markets has brought about avalue adjustment which will test the efficacy of this amalgam. So far, thetrading divisions have performed relatively well, and the strength of thegroup's balance sheet will enable it to withstand the effects of there-assessment of risk which markets now reflect. Given its well deservedreputation as an established contractor, and its involvement in high qualitydevelopments, the group is well placed to benefit when more stable marketconditions become established. Further delay in the property disposals referredto above would have an impact on the final result for the year. Richard Fildes Chairman 24 January 2008 Enquiries: Pochin's PLCDavid Shaw, Chief Executive 01606 833 333John Edwards, Finance Director Charles Stanley SecuritiesPhilip Davies/Rick Thompson 020 7149 6457 Consolidated Income Statement For the 6 months ended 30 November 2007 6 months ended 6 months ended 12 months ended 30 November 2007 30 November 2006 31 May 2007 Notes £'000 £'000 £'000 Revenue 3 54,414 53,211 116,554 Cost of sales (50,728) (45,927) (102,219) ------------------ ------------------ ------------------Gross profit 3,686 7,284 14,335 Operating expenses (5,701) (4,659) (10,621)Other operating income 2,126 1,985 3,839Gains on revaluation of investment - - 707properties ------------------ ------------------ ------------------ Operating profit 111 4,610 8,260 Share of profit/(loss) after taxation 1,940 (137) 45in joint venturesShare of profit after taxation in 119 193 241associates Finance income 1,394 1,204 2,801Finance cost (1,470) (1,493) (2,212) ------------------ ------------------ ------------------Profit before taxation 3 2,094 4,377 9,135 Taxation 48 (1,752) (2,270) ------------------ ------------------ ------------------Profit from continuing operations 2,142 2,625 6,865 Discontinued operationsLoss from discontinued operations - - (59) ------------------ ------------------ ------------------Profit for the period 2,142 2,625 6,806 ================== ================== ================== Attributable to: Equity holders of the company 2,126 2,611 6,775Minority interest 16 14 31 ------------------ ------------------ ------------------ 2,142 2,625 6,806 ================== ================== ================== Earnings per share (basic) 6 10.4p 13.0p 33.4pEarnings per share (diluted) 6 10.4p 12.9p 33.2pEarnings per share (adjusted) 6 17.9pEarnings per share (basic) from 6 10.4p 13.0p 33.6pcontinuing activitiesEarnings per share (diluted) from 6 10.4p 12.9p 33.4pcontinuing activities Dividends proposed for the period 5 3.0p 3.0p 6.25p Consolidated statement of recognised income and expense 6 months ended 6 months ended 12 months ended 30 November 2007 30 November 31 May 2006 2007Actuarial gains/(losses) on defined benefit 383 (178) 1,028pension schemeDeferred taxation on pension scheme deficit (115) 53 (310) ------------------ ------------------ ------------------Net income/(expense) recognised directly in 268 (125) 718equity Profit for the financial period 2,142 2,625 6,806 ------------------ ------------------ ------------------Total gains recognised since last period 2,410 2,500 7,524 ================== ================== ==================Attributable to: Equity holders of the company 2,394 2,486 7,493Minority interest 16 14 31 ------------------ ------------------ ------------------ 2,410 2,500 7,524 ================== ================== ================== Consolidated Balance Sheet As at 30 November 2007 As at As at As at 30 November 30 November 31 May 2007 2006 2007 Notes £'000 £'000 £'000 Non current assetsIntangible assets - 242 -Property, plant and equipment 4,021 5,585 4,400Investment properties 41,090 39,271 41,090InvestmentsJoint ventures 24,704 10,302 11,414Associates 1,309 1,989 2,037Other 2,157 2,157 2,157 28,170 14,448 15,608 ------------------ ------------------ ------------------Total non current assets 73,281 59,546 61,098 ------------------ ------------------ ------------------Current assetsInventories 39,187 39,832 35,638Trade and other receivables 18,279 20,060 19,030Cash and cash equivalents 365 2670 223Financial derivatives 3 0 253Corporation tax recoverable 612 0 55 ------------------ ------------------ ------------------Total current assets 58,446 62,562 55,199 ------------------ ------------------ ------------------Current liabilitiesTrade and other payables 24,289 22,062 24,202Corporation tax 0 1,021 0Bank loans 15,800 10,822 10,618Bank overdrafts 22,587 20,280 11,409Financial derivatives 0 222 0 ------------------ ------------------ ------------------Total current liabilities 62,676 54,407 46,229 ------------------ ------------------ ------------------Net current (liabilities)/assets (4,230) 8,155 8,970 ------------------ ------------------ ------------------Non current liabilitiesBank loans 8,813 9,211 9,207Retirement benefit obligation 27 2,566 577Deferred tax liabilities 2,412 2,075 2,413Long term provisions 484 1,642 1,632Other payables 4,757 5,122 4,757 ------------------ ------------------ ------------------Total non current liabilities 16,493 20,616 18,586 ------------------ ------------------ ------------------Net assets 52,558 47,085 51,482 ================== ================== ==================Shareholders' equityShare capital 5,200 5,200 5,200Own shares (954) (954) (954)Revaluation reserve 208 253 240Retained earnings 47,888 42,363 46,785 ------------------ ------------------ ------------------Equity shareholders' funds 52,342 46,862 51,271 Minority interest 216 223 211 ------------------ ------------------ ------------------Total equity 3 52,558 47,085 51,482 ================== ================== ================== Consolidated Cash Flow Statement For the year ended 30 November 2007 6 months ended 6 months ended 30 12 months ended 31 30 November 2007 November 2006 May 2007 Notes £'000 £'000 £'000 £'000 £'000 £'000 Net cash from operating activities Operating profit for the period 111 4,610 8,260Depreciation charge 363 489 908Impairment of intangible assets - 81 323Charge in respect of share based - 23 41paymentsProfit on sale of fixed assets (89) (23) (243)Gains on revaluation of investment - - (707)propertiesProvision against investments in joint - 1,500 1,500venturesIncome from joint ventures and 248 223 246associates Operating profit before changes in 633 6,903 10,328working capital Increase in inventories (3,549) (13,617) (9,423)Decrease in receivables 751 861 2,065(Decrease)/increase in payables (1,083) 2,563 2,714 (3,248) (3,290) 5,684 Interest paid (590) (1,493) (1,062)Income taxes paid (667) (1,277) (2,414) Net cash (used in)/from operating (4,505) (6,060) 2,208activities Investing activitiesInterest received 607 1,204 1,121Purchase of investment properties 0 (258) 0Purchase of property, plant and (167) (890) (1,880)equipmentProceeds from sale of property, plant 272 293 728and equipmentReceipt of government grants 0 0 150Increase in interest in joint ventures (10,731) (2,452) (3,234)and associates Net cash used in investing activities (10,019) (2,103) (3,115) Financing activitiesProceeds from new loans 5,000 10,000 (10,000)Repayment of loans (212) (318) (526)Dividends paid 5 (1,300) (1,248) (1,872) Net cash from financing activities 3,488 8,434 7,602 Net (decrease)/increase in cash and (11,036) 271 6,695cash equivalents Cash and cash equivalents at beginning (11,186) (17,881) (17,881)of period Cash and cash equivalents at end of (22,222) (17,610) (11,186)period Notes 1. The interim report was approved by the board on 24 January 2008. 2. Basis of preparation The interim financial information has been prepared applying the accountingpolicies and presentation that were applied in the preparation of the group'spublished consolidated financial statements for the year ended 31 May 2007. 3. Segmental information For management purposes, the group is currently organised into four operatingbusiness segments: Contracting, Property, Residential and Construction Services. As operations are carried out entirely within the UK, there is no secondarysegmental information. Inter segmental pricing is done on an arms length open market basis. 6 months ended 30 November 2007 Continuing operation Construction Group Group Contracting Property Residential services management Total £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 42,274 - 4,241 7,899 - 54,414Inter-segment sales 731 - - 529 - 1,260Eliminations (731) - - (529) - (1,260) ------------ ------------ ------------ ------------ ------------ ------------Total revenue 42,274 - 4,241 7,899 - 54,414 ------------ ------------ ------------ ------------ ------------ ------------ Segment ResultOperating profit/(loss) (259) 1,054 (295) 468 (857) 111Share of results of jointventures and associates - 2,059 - - - 2,059Net finance income/(costs ) 88 (199) 2 6 27 (76) ------------ ------------ ------------ ------------ ------------ ------------(Loss)/profit before (171) 2,914 (293) 474 (830) 2,094taxation ------------ ------------ ------------ ------------ ------------ ------------Taxation 48 ------------Profit from continuingoperations 2,142 ------------ Construction Elimination of Group inter-segment Contracting Property Residential services items Total £'000 £'000 £'000 £'000 £'000 £'000Assets and liabilities Segment assets 24,239 91,092 13,556 8,220 (31,393) 105,714Investment in equity - - - -accounted joint venturesand associates 26,013 26,013 ------------ ------------ ------------ ------------ ------------ ------------Total assets 24,239 117,105 13,556 8,220 (31,393) 131,727Segment liabilities 18,469 35,860 5,868 1,365 (31,393) 30,169Borrowings - 39,866 7,079 255 - 47,200Taxation 208 1,018 236 338 - 1,800 ------------ ------------ ------------ ------------ ------------ ------------Net assets 5,562 40,361 373 6,262 - 52,558 ------------ ------------ ------------ ------------ ------------ ------------Other information Capital expenditure 44 - - 123 - 167Depreciation 37 46 - 280 - 363 6 months ended 30 November 2006 Continuing operations Construction Group Group Contracting Property Residential services management Total £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 36,221 5,343 4,101 7,546 - 53,211Inter-segment sales 680 - - 455 - 1,135Eliminations (680) - - (455) - (1,135) ------------ ------------ ------------ ------------ ------------ ------------Total revenue 36,221 5,343 4,101 7,546 - 53,211 ------------ ------------ ------------ ------------ ------------ ------------ Segment ResultOperating profit/(loss) 1,168 3,469 57 445 (529) 4,610Share of results of joint - 56 - - - 56ventures and associatesNet finance costs - (253) - (36) - (289) ------------ ------------ ------------ ------------ ------------ ------------Profit/(loss) before 1,168 3,272 57 409 (529) 4,377taxation ------------ ------------ ------------ ------------ ------------ ------------Taxation (1,752) ------------Profit from continuingoperations 2,625 ------------ Construction Elimination of Group inter-segment Contracting Property Residential services items Total £'000 £'000 £'000 £'000 £'000 £'000Assets and liabilities Segment assets 23,216 66,899 10,693 9,009 - 109,817Investment in equity - 12,291 - - - 12,291accounted joint venturesand associates ------------ ------------ ------------ ------------ ------------ ------------Total assets 23,216 79,190 10,693 9,009 - 122,108Total liabilities 19,767 41,623 10,584 3,049 - 75,023Borrowings - 33,649 6,346 318 - 40,313Taxation (373) 2,943 97 429 - 3,096 ------------ ------------ ------------ ------------ ------------ ------------Net assets 3,449 37,567 109 5,960 - 47,085 ------------ ------------ ------------ ------------ ------------ ------------Other information Capital expenditure 228 782 - 138 - 1,148Depreciation 36 48 - 405 - 489Provision against - 1,500 - - - 1,500investment in jointventuresImpairment of inventories - - 12 - - 12Impairment of goodwill - - - 81 - 81 12 months ended 31 May 2007 Continuing operations Construction Group Contracting Property Residential services management Group Total £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 82,755 8,613 11,004 14,182 - 116,554Inter-segment sales 1,201 - - 928 - 2,129Eliminations (1,201) - - (928) - (2,129) ------------ ------------ ------------ ------------ ------------ ------------Total revenue 82,755 8,613 11,004 14,182 - 116,554 ------------ ------------ ------------ ------------ ------------ ------------Segment resultOperating profit/(loss) 2,108 6,468 752 154 (1,222) 8,260Share of results of joint - 286 - - - 286ventures and associatesNet finance income/(costs) - 658 - (69) - 589 ------------ ------------ ------------ ------------ ------------ ------------Profit/(loss) before 2,108 7,412 752 85 (1,222) 9,135taxation ------------ ------------ ------------ ------------ ------------Taxation (2,270) ------------Profit from continuing 6,865operations ------------Discontinued operations Segment resultOperating loss - - - (534) - (534)Loss from discontinued (59)operations ------------ Construction Elimination of Group inter-segment Contracting Property Residential services items Total Assets and liabilities Segment assets 25,553 90,865 11,789 7,797 (33,158) 102,846Investment in equity - 13,451 - - - 13,451accounted joint venturesand associates ------------ ------------ ------------ ------------ ------------ ------------Total assets 25,553 104,316 11,789 7,797 (33,158) 116,297Segment liabilities 19,864 39,919 3,137 1,461 (33,158) 31,223Borrowings - 23,102 7,843 289 - 31,234Taxation 82 1,787 225 264 - 2,358 ------------ ------------ ------------ ------------ ------------ ------------Net assets 5,607 39,508 584 5,783 - 51,482 ------------ ------------ ------------ ------------ ------------ ------------Other information Capital expenditure 331 1,253 - 296 - 1,880Depreciation 78 93 - 737 - 908Provision against - 1,500 - - - 1,500investment in jointventuresImpairment of inventories - 207 - - - 207Impairment of goodwill - 386 - 323 - 323 4 Taxation The taxation charge is calculated by applying the estimated effective annual taxrate to the profit for the period. The tax assessed for the period is lowerthan the standard rate of corporation tax in the United Kingdom as a result ofthe utilisation of losses in joint venture companies. 5 Dividends 6 months ended 6 months 12 months ended ended 30 November 2007 30 November 2006 31 May 2007 £'000 £'000 £'000 Interim paid 3.0p per share - - 624Final paid 6.25p (2006: 6.0p) per 1,300 1,248 1,248share ------------------- ------------------- ------------------- 1,300 1,248 1,872 ------------------- ------------------- ------------------- The interim dividend of 3.0p (2006: 3.0p) per share will be paid on 7 April 2008to shareholders on the register at 8 February 2008. The dividend has not been included as a liability as at 30 November 2007. 6 Earnings per share The calculation of earnings per share (basic and diluted) is based on groupprofit after taxation and minority interests of £2,126,000 (2006 : £2,611,000)and the 20,800,000 ordinary shares of 25p in issue at 30 November 2007 and 30November 2006. The number of shares in the calculation has been reduced at 30 November 2007 forthe 449,500 (2006 : 686,000) shares held in the Employee Share Trust. Basicearnings per share is 10.4p (2006: 13.0p). The assumed conversion of dilutiveoptions increases the number of shares by 38,000 (2006: 168,000) shares and sodiluted earnings per share remains at 10.4p (2006:12.9p). 6 months ended 30 November 2007 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 2,126 20,361 10.4Effect of share options - 38 - --------------------- --------------------- ---------------------Diluted EPS 2,126 20,389 10.4 --------------------- --------------------- --------------------- 6 months ended 30 November 2006 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 2,611 20,114 13.0Effect of share options - 168 (0.1) --------------------- --------------------- ---------------------Diluted EPS 2,611 20,282 12.9 --------------------- --------------------- --------------------- 12 months ended 31 May 2007 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 6,775 20,313 33.4Effect of share options - 118 (0.2) --------------------- --------------------- ---------------------Diluted EPS 6,775 20,431 33.2 --------------------- --------------------- --------------------- The calculation of earnings per share (basic and diluted) for the group'scontinuing and discontinued operations for the 12 months ended 31 May 2007 areset out below. There were no discontinued operations for the 6 months ended 30November 2007 and 30 November 2006: 12 months ended 31 May 2007 Weighted average Earnings no. of shares Per shareContinuing operations £'000 '000 p Basic EPS 6,834 20,313 33.6Effect of share options - 118 (0.2) --------------------- --------------------- ---------------------Diluted EPS 6,834 20,431 33.4 --------------------- --------------------- --------------------- 12 months ended 31 May 2007 Weighted average Earnings no. of shares Per shareDiscontinued operations £'000 '000 p Basic EPS (59) 20,313 (0.2)Effect of share options - 118 - --------------------- --------------------- ---------------------Diluted EPS (59) 20,431 (0.2) --------------------- --------------------- --------------------- 7. The comparative figures for the year ended 31 May 2007 do not constitutestatutory accounts for the purpose of section 240 of the Companies Act 1985. Acopy of the statutory accounts for the year ended 31 May 2007, which wereprepared under International Financial Reporting Standards and which theauditors gave an unqualified report in accordance with section 235 of theCompanies Act 1985, have been filed with the Registrar of Companies. 8. Copies of this interim report will be sent to all registered shareholdersduring February 2008. Further copies of the interim report are available fromthe Company Secretary, Pochin's PLC, Brooks Lane, Middlewich, Cheshire, CW100JQ. This interim report will also be available on the group's website(www.pochins.plc.uk). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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