27th Feb 2006 07:01
Pochin's PLC27 February 2006 Pochin's PLC Interim Results for the six months ended 30 November 2005 Highlights •Turnover up 70% at £77.7m (2004: £45.7m) •Profit before taxation increased to £7.43m (£0.54m) •Interim dividend up 10% to 2.75p (2004:2.5p) •Disposal of purpose built student accommodation at Crewe Green •Healthy Contracting order book Chairman's Statement Results and Dividends I am pleased to announce an exceptional half-year result, with profits beforetaxation of £7.43m (30 November 2004: £0.54m) on turnover of £77.7m (30 November2004: £45.7m). The board recommend an increased interim dividend of 2.75p pershare (2004: 2.5p per share) on earnings per share of 21.7p (30 November 2004:2.1p). The exceptional result was derived from property sales, the most significantbeing the sale of the student accommodation development, pre-let to theManchester Metropolitan University at Crewe, ("Crewe Green development") whichwe announced in October last year. These are the first results of the Company published under InternationalFinancial Reporting Standards. Further details are given in the Group Financesection below. Trading Contracting The secured order book remains healthy, at £77m for the year. Profitability wasaffected in the first half as circumstances outside our control led to thedeferment of a number of key contracts. These have now recommenced and as aresult we anticipate a significantly stronger performance in the second half. Construction Services This division has maintained its progress in terms of profit performance,following action taken in the second half of last year to reduce costs andimprove margins. The scarcity of infrastructure works referred to in mystatement accompanying the annual results remains and consequently certain partsof the division continue to experience difficult trading conditions. Property and Joint Ventures Property sales in the first six months have produced an excellent return for theGroup. We do not anticipate any significant property sales during the secondhalf of the year, although progress is being made on a number of newdevelopments that are at an early stage and should come to fruition in the nextfew years. Since my last report, in line with our stated policy, we haveinvested in further joint venture projects at Deeside and Holyhead and lookforward to working with our partners to secure healthy returns in future years.I am pleased to report an increase in general enquiry levels for the empty spacein the buildings developed by Manchester Technopark Limited, our joint venturewith Manchester Science Park Limited. Residential The growth of Pochin Homes has continued with the opening up of two new sites.Despite the general slowdown in the market, a small profit has been achieved andwe anticipate higher levels of sales in the second half, although there could bea shortfall on our stated target of 78 sales for the year. Group Finance I advise that European Union listed companies are now required to prepareconsolidated financial statements in accordance with International FinancialReporting Standards (IFRS). Consequently, in conjunction with this statement wehave issued a report to the London Stock Exchange that provides financialinformation showing the impact of the group's transition from a UK GenerallyAccepted Accounting Principals (UK GAAP) basis to an IFRS basis. The adoption ofIFRS will have no impact upon the underlying cash flows from trading activitiesof the group, but it will impact on the timing of both revenue and profit. Inventories reduced in the period by £15.9m following completion and subsequentsale of the Crewe Green development. The proceeds from that sale were used, inpart, to increase investment in new development opportunities by £6.9m, mostnoticeably at Keele, Deeside and Crewe Green and to extend our joint ventureactivity by a further £5.2m particularly with new partners at Deeside andBirkenhead. The remaining income was used to reduce net borrowings, which at 30November 2005 were £21.0m (31 May 2005: £35.6m). Prospects Whilst no material property sales are anticipated, improved performances fromthe trading divisions should add to these results during the remainder of thefinancial year. Directors At the end of 2005, whilst on holiday, Peter Dickson died in a tragic accident.Peter was non-executive deputy chairman of the company, having joined the Boardin January 2002, and was hugely valued as a member of the team. We shall misshim greatly. I would again like to extend our deepest sympathy to Mrs Dicksonand family. John WoodcockChairman 27 February 2006 Enquiries: Pochin's PLCDavid Shaw, Chief Executive 01606 833 333 Charles Stanley SecuritiesPhilip Davies/Rick Thompson 020 7953 2000 Consolidated income statement Restated Restated 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2005 2004 2005 Notes £'000 £'000 £'000 Revenue 5 77,719 45,709 93,886Cost of sales (62,537) (40,900) (81,420) ---------------- ---------------- ----------------Gross profit 15,182 4,809 12,466 Operating expenses (9,021) (5,601) (11,224)Other operating income 1,529 1,775 3,633Gains on revaluationof investment properties - - 2,459 ---------------- ---------------- ----------------Operating profit 7,690 983 7,334 Share of profit/(loss)after taxation in joint ventures 4 (144) (178)Share of profit aftertaxation in associates 165 139 417Finance income 817 794 1,339Finance cost (1,240) (1,234) (2,804) ---------------- ---------------- ----------------Profit before taxation 5 7,436 538 6,108Taxation (3,043) (91) (2,034) ---------------- ---------------- ----------------Profit on ordinaryactivities after 4,393 447 4,074taxation ========= ========= =========Attributable to:Equity holders of the company 4,378 434 4,047Minority interest 15 13 27 ---------------- ---------------- ----------------Retained profit for the period 4,393 447 4,074 ========= ========= ========= Earnings per share 8 21.7p 2.1p 20.0p(basic)Earnings per share 8 21.5p 2.1p 19.9p(diluted) Dividends proposed for 7 2.75p 2.50p 5.10pthe period Consolidated statement of recognised income and expense Restated Restated 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2005 2004 2005 Actuarial losses ondefined benefit pension scheme 996 1,244 627Deferred taxation onpension scheme deficit (299) (373) (188) ---------------- ---------------- ----------------Net expense recogniseddirectly in equity (697) (871) (439) Profit for the financial period 4,393 447 4,074 ---------------- ---------------- ----------------Total gains/(losses)recognised since last period 3,696 (424) 3,635 ========= ========= =========Attributable to:Equity holders of the company 3,681 (437) 3,608Minority interest 15 13 27 ---------------- ---------------- ---------------- 3,696 (424) 3,635 ========= ========= ========= Consolidated Balance Sheet Restated Restated As at As at As at 30 November 30 November 31 May 2005 2004 2005 Notes £'000 £'000 £'000 Non currentassetsIntangible assets 897 1,056 1,312Property, plant and equipment 9,254 17,579 8,232Investment properties 34,704 21,118 30,021InvestmentsJoint ventures 7,728 3,210 5,205Associates 2,408 2,564 2,585Other 2,157 2,157 2,157 12,293 7,931 9,947 ------------------- ------------------- ----------------Total non current assets 57,148 47,684 49,512 ------------------- ------------------- ----------------Current assetsInventories 24,888 33,724 40,811Trade and other receivables 18,918 14,823 18,093Cash and cash equivalents 13,608 11,521 12,906 ------------------- ------------------- ----------------Total current assets 57,414 60,068 71,810 ------------------- ------------------- ----------------Total assets 114,562 107,752 121,322 =========== =========== ===========EquityShare capital 5,200 5,200 5,200Own shares (847) (847) (847)Revaluation reserve 343 814 596Retained earnings 42,065 35,485 39,237 ------------------- ------------------- ----------------Equity 46,761 40,652 44,186shareholdersfunds Minority 221 211 223interest ------------------- ------------------- ----------------Total equity 5 46,982 40,863 44,409 =========== =========== =========== Non currentliabilitiesBank loans 10,133 10,172 10,351Retirement benefitobligation 5,624 4,932 4,391Deferred tax liabilities 1,190 867 1,385Long term provisions 794 753 712Obligationsunder finance leases 145 792 219Other payables 3,589 3,416 3,675 ------------------- ------------------- ----------------Total non currentliabilities 21,475 20,932 20,733 =========== =========== ===========CurrentliabilitiesTrade and other payables 17,956 18,134 16,260Tax liabilities 3,342 287 1,941Obligationsunder finance leases 154 253 176Bank loans and overdrafts 24,207 27,283 37,428Financial derivatives 446 - 375 ------------------- ------------------- ----------------Total current liabilities 46,105 45,957 56,180 ------------------- ------------------- ----------------Total liabilities 67,580 66,889 76,913 ------------------- ------------------- ----------------Total equity and liabilities 114,562 107,752 121,322 =========== =========== =========== Consolidated Cash Flow Statement 6 months ended Restated Restated 6 months ended 12 months ended 30 November 2005 30 November 2004 31 May 2005 Notes £'000 £'000 £'000 £'000 £'000 £'000Net cash fromoperatingactivitiesOperating 7,619 983 4,500profit for theyearDepreciation 702 817 1,577chargeImpairment of 415 95 258intangibleassetsProfit on sale (306) (3) (94)of fixedassetsWrite off of 2,693 - -investments injoint venturesIncome from 21 31 284joint ventures ------------ ------------ ------------Operatingprofit before 11,144 1,923 6,525changes inworkingcapital Decrease/ 15,923 (5,065) (9,726)(increase) ininventoriesIncrease in (825) (1,228) (4,498)receivablesIncrease/ 2,204 183 (743)(decrease) inpayables ------------ ------------ ------------ Cash generated 28,446 (4,187) (8,442)fromoperations Interest paid (367) (502) (886)Income taxes (1,610) (1,213) (2,052)paid ------------ ------------ ------------Net cash used 26,469 (5,902) (11,380)in operatingactivities InvestingactivitiesInterest 280 349 396receivedPurchase of - (2,741) (2,741)subsidiaryundertakingPurchase ofinvestment (6,867) (2,238) (3,677)property,property andplantProceeds fromsale of 766 199 827investmentproperty,property andplantReceipt of 140 354 585governmentgrantsRepayment of (280) - -governmentgrantsNet cash onpurchase of - 2,972 2,972subsidiaryundertaking(Increase)/decrease in (5,210) 450 (1,602)interest injoint venturesand associatesPurchase of - (2,445) (2,445)unincorporatedbusinessesPurchase of - (240) (240)own sharesCash(withdrawn)/ (699) 108 (1,275)deposited atcall and shortnotice ------------ ------------ ------------ Net cash used (11,870) (3,232) (7,200)in investingactivities FinancingactivitiesProceeds from - 10,430 11,000issue of loancapitalPayment of (411) (310) (4,832)loan capitalPayment of (96) (113) (192)finance leaseliabilitiesDividends paid 7 (1,061) (967) (1,487) ------------ ------------ ------------ ------------Net cash from (1,568) 9,040 4,489financingactivities Net increase/(decrease) in 13,031 (94) (14,091)cash and cashequivalents Cash and cashequivalents at (36,698) (22,607) (22,607)beginning ofyear ------------ ------------ ------------Cash and cashequivalents at (23,667) (22,701) (36,698)end of year ======= ======= ======= Notes 1. The interim report was approved by the board on 24 February 2006. 2. Transition to IFRS All listed companies in the European Union are required to present theirconsolidated financial statements for accounting periods beginning on or after 1January 2005 in accordance with International Financial Reporting Standards(IFRS) as adopted by the European Union. As a result, the group's consolidatedfinancial statements for the year ending 31 May 2006 will be presented on thisbasis with IFRS comparative figures. These interim financial statements havebeen prepared on the basis of the IFRS accounting policies expected to beadopted in the year-end consolidated financial statements. The group's transition date for adoption of IFRS is 1 June 2004. This date hasbeen selected in accordance with IFRS1, "First time adoption of InternationalFinancial Reporting Standards". Prior to the adoption of IFRS, the financial statements of Pochin's PLC had beenprepared in accordance with United Kingdom Generally Accepted AccountingPrinciples (UK GAAP). UK GAAP differs in certain respects from IFRS and certainaccounting, valuation and consolidation methods have been amended, whenpreparing these financial statements, to comply with IFRS. The comparativefigures in respect of 30 Novemvber 2004 and 31 May 2005 have been restated toreflect these amendments. Reconciliation and description of the effect of thetransition from UK GAAP to IFRS on the group's reported financial position andfinancial performance are set out in note 4. A detailed review of the changes in our accounting policies and reconciliationsof our financial statements from UK GAAP to IFRS at key dates has been publishedto the London Stock Exchange on 27 February 2006 and is available on the group'swebsite (www.pochins.plc.uk). 3 Principal accounting policies The accounting policies that the group intends to apply for the year ended 31May 2006 are set out in the document referred to in note 2 above. 4 Reconciliation between UK GAAP and IFRS The principal changes arising from the presentation of the 30 November 2004 and31 May 2005 results under IFRS are: (a) Profit before tax 6 months ended 12 months ended 30 November 2004 31 May 2005 £'000 £'000 As previously reported under UK GAAP 870 5,804Impairment of intangible assets 66 148Movement in pension scheme deficit (209) (285)Share based payments (10) (24)Recognition of property sales based on completion of contract (145) (1,539)Joint venture and associate share of (34) (80)taxationProvision for loss on interest rate swap - (375)Revaluation gains on investment properties reported as income - 2,459 ------------------ -----------------IFRS profit before tax 538 6,108 ========== ========== (b) Taxation 6 months ended 12 months ended 30 November 2004 31 May 2005 £'000 £'000Current tax As previously reported under UK GAAP 331 2,298Joint venture and associate share of taxation (34) (80) ------------------ ------------------As restated under IFRS 297 2,218 Deferred tax As previously reported under UK - 124GAAPInvestment property (surpluses)/ deficits (96) 360Pension scheme deficit (63) (86)Share based payments (3) (7)Property sales (44) (462)Interest rate swap - (113) ------------------ ------------------As restated under IFRS (206) (184) ------------------ ------------------Taxation as restated under IFRS 91 2,034 ------------------ ------------------ (c) Profit after tax 6 months ended 12 months ended 30 November 2004 31 May 2005 £'000 £'000 As previously reported under UK GAAP 539 3,382IFRS adjustments to profit before taxation (332) 304IFRS adjustments to taxation 240 388 ------------------ ------------------IFRS profit after tax 447 4,074 ------------------ ------------------ (d) Net assets 6 months ended 12 months ended 30 November 2004 31 May 2005 £'000 £'000 As previously reported under UK GAAP 46,581 49,973 Impairment of intangible assets 66 148Pension scheme deficit (3,452) (3,074)Recognition of property sales based on completion of contract (375) (1,351)Deferred tax on investment property surpluses (1,630) (2,086)Proposed dividend adjustment 520 1,061Purchase of own shares (847) -Provision for loss on interest rate swap - (262) ------------------ ------------------Restated under IFRS 40,863 44,409 ------------------ ------------------ 5. Segmental information by activity: Restated Restated 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2005 2004 2005 £'000 £'000 £'000RevenueContracting 32,354 33,553 59,185Construction services 10,234 9,725 18,691Property 33,587 2,265 13,003Residential 1,544 166 3,007 ------------------- ------------------- ------------------- 77,719 45,709 93,886 ------------------- ------------------- -------------------Profit/(loss) onordinary activitiesbefore taxationContracting (579) 483 710Construction services 331 200 138Property 7,792 180 5,967Residential 13 (162) 6Group management cost (443) (487) (975)Group interest 322 324 262 ------------------- ------------------- ------------------- 7,436 538 6,108 ------------------- ------------------- -------------------Net assetsContracting 2,707 3,197 4,624Construction services 6,008 5,918 5,784Property 26,070 19,255 21,892Residential (247) (367) (202)Group interest 12,444 12,860 12,311 ------------------- ------------------- ------------------- 46,982 40,863 44,409 ------------------- ------------------- ------------------- Turnover, profit/(loss) before taxation and net assets are derived fromoperations within the United Kingdom. 6. The taxation charge is calculated by applying the estimated effective annualtax rate to the profit for the period. The tax assessed for the period is higherthan the standard rate of corporation tax in the United Kingdom as a result ofexpenses not deductible for tax purposes and interest charges and losses injoint venture companies not utilised. 7. Dividends Restated Restated 6 months ended 6 months ended 12 months ended 30 November 2005 30 November 2004 31 May 2005 £'000 £'000 £'000 Interim paid 2.50p - - 520per shareFinal paid 5.10p 1,061 967 967(2004: 4.65p) pershare ------------------- ------------------- ------------------- 1,061 967 1487 ------------------- ------------------- ------------------- 8. The calculation of earnings per share (basic and diluted) is based on groupprofit after taxation and minority interests of £4,378,000 (2004 : £434,000restated) and the 20,800,000 ordinary shares of 25p in issue at 30 November 2005and 30 November 2004. The number of shares in the calculation has been reducedat 30 November 2005 for the 589,000 (2004 : 589,000) shares held in the EmployeeShare Trust. Basic earnings per share is 21.7p (2004: 2.1p restated). Theassumed conversion of dilutive options increases the number of shares by 194,000(2004: 80,000) shares and so diluted earnings per share decreases to 21.5p(2004:2.1p restated). 6 months ended 30 November 2005 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 4,378 20,211 21.7Effect of share options - 194 0.2 --------------------- --------------------- ---------------------Diluted EPS 4,378 20,405 21.5 --------------------- --------------------- --------------------- Restated 6 months ended 30 November 2004 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 434 20,211 2.1Effect of share options - 80 - --------------------- --------------------- ---------------------Diluted EPS 434 20,291 2.1 --------------------- --------------------- --------------------- Restated 12 months ended 31 May 2005 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 4,047 20,262 20.0Effect of share options - 94 0.1 --------------------- --------------------- ---------------------Diluted EPS 4,047 20,356 19.9 --------------------- --------------------- --------------------- 9. The comparative figures for the year ended 31 May 2005 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 2005, which wereprepared under UK GAAP and which the auditors gave an unqualified report inaccordance with section 235 of the Companies Act 1985, have been filed with theRegistrar of Companies. 10. Copies of this interim report are being sent to shareholders on 2 March2006. Further copies of the interim report are available from the CompanySecretary, Pochin's PLC, Brooks Lane, Middlewich, Cheshire, CW10 0JQ. Thisinterim 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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