18th Feb 2005 12:12
Pochin's PLC18 February 2005 Interim results of Pochin's PLC for the 6 months ended 30 November 2004 Chairman's statement RESULTS AND DIVIDENDS I am pleased to report interim profits before tax of £870,000 (2003: £751,000)on turnover of £45.2m (2003: £32.7m). The interim dividend is increased to 2.5pper share (2003: 2.25p). TRADING Contracting This division is making solid progress, demonstrated by the increased turnoverand contribution to profits in this half year. The level of forward orders hasbeen maintained, and there is an encouraging level of repeat and negotiatedwork. Construction services I am delighted that the acquisition and successful integration of RayneswayConcrete Pumping, combined with improved efficiencies, has increased turnoverand profits in the concrete pumping division in this period. The level ofcurrent trading indicates that this improvement is being maintained. It is, however, disappointing to report that the recovery in AvoidatrenchLimited at the start of this financial year proved to be short lived and losseshave arisen in the second quarter. We have scaled down the business to meetreduced demand evident in the market and, with a lower operational cost base,some improvement is anticipated in the second half. Property and joint ventures Pochin Homes Limited is making good progress, notwithstanding the delays causedby planning issues. Construction is under way on two sites in the Potteries andthe level of reservations to date encourages me to believe that completions inthe second half will produce an overall profit for the year. Following successful lettings in the latest medical incubator building,completed by Keele Park Developments Limited in October 2004, we have commencedthe next building, which is due for completion in early 2006. This will be thefourth of the buildings developed by our unique public / private partnershipwith Keele University. Whilst there were no material disposals in the period, negotiations for thedisposal of a number of completed developments are in progress. I anticipatethat some of these disposals will be completed by 31 May 2005. GROUP FINANCE The acquisitions of Raynesway Concrete Pumping and of the remaining interests inthe Bushwing group of companies were both completed early in this half year. Theformer transaction was largely financed by debt and the Bushwing transaction wasfinanced from group resources. Expenditure on property developments currently in progress has increased debtduring the period and further expenditure will continue to be financed byshort-term borrowings over the coming months, notwithstanding receipts fromplanned disposals. Short-term development finance of £9m on the first three buildings at Keele Parkhas been converted into a long-term loan facility, with repayments commencing inNovember 2006. PROSPECTS Profits arising from planned property disposals, together with the overallimprovement in the performance of the trading divisions, lead me to anticipate asatisfactory outcome for this financial year. J H WoodcockChairman18 February 2005 Consolidated Profit and Loss Account 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2004 2004 2003 Notes £'000 £'000 £'000 ----------------- ------- ---------- ---------- ----------- TurnoverGroup and share ofjoint ventures 45,174 33,141 78,307Less: share of jointventures - (454) (12,397) ---------- ---------- ----------- 3 45,174 32,687 65,910 ---------- ---------- ----------- ---------- ---------- ----------- Cost of sales (40,220) (29,081) (58,178) ---------- ---------- -----------Gross profit 4,954 3,606 7,732 Operating expenses (5,483) (4,297) (8,931)Other operating income 1,775 1,766 3,359 ---------- ---------- ----------- Operating profit 1,246 1,075 2,160 Share of operating(loss)/profit in jointventures (138) (165) 3,270Share of operatingprofit in associates 167 180 365 Net interest (405) (339) (715) ---------- ---------- -----------Profit on ordinaryactivities beforetaxation 3 870 751 5,080 Tax on profit onordinary activities 4 (331) (279) (1,938) ---------- ---------- -----------Profit on ordinaryactivities aftertaxation 539 472 3,142 Equity minorityinterest (13) (13) (28) ---------- ---------- -----------Profit for thefinancial period 526 459 3,114 Dividends 5 (520) (468) (1,435) ---------- ---------- -----------Retained profit/(loss)for the period 6 (9) 1,679 ---------- ---------- ----------- Earnings per share(basic) 6 2.6p 2.3p 15.3pEarnings per share(diluted) 6 2.6p 2.2p 15.3p Statement of Total Recognised Gains and Losses ----------------- ------- ---------- ---------- ----------- Profit for thefinancial period 526 459 3,114 Unrealised deficit onrevaluation ofinvestment properties -group - (2) (104)Unrealised deficit onrevaluation ofinvestment properties -joint ventures - (13) - ---------- ---------- ----------- ---------- ---------- -----------Total gains recognisedsince last period 526 444 3,010 ---------- ---------- ----------- Note of Historical Cost Profits and Losses ----------------- ------- ---------- ---------- ----------- Reported profit onordinary activitiesbefore taxation 870 751 5,080 Realisation ofrevaluation surplusesof previous years -group 52 52 242Realisation ofrevaluation surplusesof previous years -joint ventures - - 641Difference betweenhistorical costdepreciation charge anddepreciation charge 30 101 155based on revaluedamounts ---------- ---------- -----------Historical cost profiton ordinary activitiesbefore taxation 952 904 6,118 ---------- ---------- ----------- Historical cost profitretained for the periodafter taxation, minority 88 144 2,717interest and dividends ---------- ---------- ----------- Consolidated Balance Sheet As at As at As at 30 November 30 November 31 May 2004 2003 2004 Notes £'000 £'000 £'000 ----------------- ------- ---------- ---------- ----------- Fixed assetsIntangible assets 990 552 443Tangible assets 38,697 30,119 32,466Investments ---------- ---------- -----------Joint venturesShare of gross assets 9,228 24,106 20,228Share of gross liabilities (6,943) (15,901) (11,182)Goodwill 925 78 988 ---------- ---------- ----------- 3,210 8,283 10,034Associates 2,564 2,488 2,547Other 2,157 1,500 2,157Own shares 847 607 607 ---------- ---------- ----------- 8,778 12,878 15,345 ---------- ---------- ----------- 48,465 43,549 48,254 ---------- ---------- ----------- Current assetsStocks and work in progress 32,593 16,603 20,077Debtors 16,538 11,076 11,342Investments and deposits 11,518 10,773 10,776Cash in hand 3 5 4 ---------- ---------- ----------- 60,652 38,457 42,199 ---------- ---------- -----------Creditors: amounts falling due within oneyear Borrowings (27,536) (21,367) (23,313)Trade and other creditors (18,941) (11,656) (15,485) ---------- ---------- ----------- (46,477) (33,023) (38,798) ---------- ---------- ----------- Net current assets 14,175 5,434 3,401 ---------- ---------- -----------Total assets less current liabilities 62,640 48,983 51,655 Creditors: amounts falling due after morethan one yearBorrowings (10,964) (790) (695)Other - (233) (233) Provisions for liabilities and charges (1,631) (1,159) (1,714) Accruals and deferred income (3,464) (1,836) (2,441) ---------- ---------- -----------Net assets 3 46,581 44,965 46,572 ---------- ---------- ----------- Capital and reservesCalled up share capital 5,200 5,200 5,200Revaluation reserve 8,725 9,781 8,807Profit and loss account 32,445 29,784 32,357 ---------- ---------- -----------Equity shareholders' funds 46,370 44,765 46,364 Equity minority interest 211 200 208 ---------- ---------- ----------- 46,581 44,965 46,572 ---------- ---------- ----------- Consolidated CashFlow Statement 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2004 2004 2003 Notes £'000 £'000 £'000 £'000 £'000 £'000 ----------------- ------- ------ ------- ------ ------- ----- ------ Net cash(outflow)/inflow fromoperatingactivities 7 (4,285) 867 2,804 Incomereceived fromjoint ventures 31 270 528 Returns oninvestments andservicing offinance Interestreceived 349 161 289 Interest paid (455) (190) (427) Interest paidon financeleases (47) (23) (34) ------ ------ ----- Net cash outflow fromreturns on investment andservicing of finance (153) (52) (172) Taxation (1,213) (791) (1,191) Capitalexpenditure andfinancialinvestment Purchase oftangible fixedassets (4,038) (1,333) (4,627) Receipt ofgovernmentgrant 354 - 605 Sale oftangible fixedassets 199 521 835 ------ ------ ----- Net cash outflow fromcapital expenditure andfinancial investment (3,485) (812) (3,187) Acquisitions anddisposals Purchase ofsubsidiaryundertaking (2,398) - (13) Net(overdraft)/cashfrompurchase ofsubsidiaryundertaking (276) - 13 Decrease/(increase)ininterest injoint venturesand associates 450 (1,630) (1,531) Purchase ofgoodwill (645) - - Purchase ofother fixedassetinvestment - - (657) Purchase ofown shares (240) - - ------ ------ ----- Net cashoutflow fromacquisitionsand disposals (3,109) (1,630) (2,188) Equitydividends paid (967) (884) (1,352) ------- ------- ------Net cash outflowbefore financingandmanagement ofliquidresources (13,181) (3,032) (4,758) ------ ------ ----- Net cash inflow/(outflow) frommanagement ofliquidresources Cash deposited/(withdrawn) at call and short notice 3,080 (171) (161) Financing New loancapital 10,430 800 800 Repayment ofloan capital (310) (310) (510) Repayment ofprincipal underfinance leases (113) (115) (224)and hire purchase ------ ------ -----contracts Net cashinflow fromfinancing 10,007 375 66 ------- ------- ------Decrease incash in theperiod (94) (2,828) (4,853) ------- ------- ------ Reconciliation of net cash flow to movement in netdebt -------------------------------- Decrease incash in theperiod (94) (2,828) (4,853) Cash inflowfrom increasein debt andleasefinancing (10,007) (375) (66) Cash(inflow)/outflow from(increase)/decrease inliquidresources (3,080) 171 161 ------- ------- ------Change in netdebt resultingfrom cashflows (13,181) (3,032) (4,758) Inception offinance leases (570) (152) (275) ------- ------- ------Movement innet debt inthe period (13,751) (3,184) (5,033) Opening netdebt (13,228) (8,195) (8,195) ------- ------- ------Closing netdebt (26,979) (11,379) (13,228) ------- ------- ------ Notes 1 The interim report was approved by the board on 18 February 2005. 2 The figures for the six months ended 30 November 2004 and 30 November 2003 are unaudited. These figures have been prepared using accounting policies consistent with those adopted in the 2004 annual report and accounts. 3 Segmental information by activity: 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2004 2004 2003 £'000 £'000 £'000 Turnover Contracting 33,553 24,374 48,927 Construction 9,725 8,178 15,625 services Property 1,896 135 1,358 ------- -------- ------ 45,174 32,687 65,910 Joint ventures Property - 454 12,397 ------- -------- ------ 45,174 33,141 78,307 ------- -------- ------ Profit/(loss) on ordinary activities before taxation Contracting 593 49 781 Construction 207 (163) (1,085) services Property 457 1,274 2,333 Group management (487) (361) (723) cost Group 324 227 682 interest ------- -------- ------ 1,094 1,026 1,988 Joint ventures and associates Property - joint (268) (335) 2,962 ventures Property - 44 60 130 associates ------- -------- ------ 870 751 5,080 ------- -------- ------ Net assets Contracting (5,112) (1,856) (3,177) Construction 10,714 8,409 8,249 services Property 22,345 15,441 16,043 Group 12,860 12,200 12,876 interest ------- -------- ------ 40,807 34,194 33,991 Joint ventures and associates Property - joint 3,210 8,283 10,034 ventures Property - 2,564 2,488 2,547 associates ------- -------- ------ 46,581 44,965 46,572 ------- -------- ------ Turnover, profit/(loss) before taxation and net assets are derived from operations within the United Kingdom. 4 The taxation charge is calculated by applying the estimated effective annual tax rate to the profit for the period. The tax assessed for the period is higher than the standard rate of corporation tax in the United Kingdom as a result of expenses not deductible for tax purposes and interest charges and losses in joint venture companies not utilised. 5 The interim dividend of 2.5p per share (2003 : 2.25p per share) will be paid on 7 April 2005 to shareholders on the register at 11 March 2005. 6 The calculation of earnings per share (basic and diluted) is based on group profit after taxation and minority interests of £526,000 (2003 : £459,000) and the 20,800,000 ordinary shares of 25p in issue at 30 November 2004 and 30 November 2003. The number of shares in the calculation has been reduced at 30 November 2004 for the 589,000 (2003 : 442,000) shares held in the Employee Share Trust. Basic earnings per share is 2.6p (2003: 2.3p). The assumed conversion of dilutive options increases the number of shares by 80,000 (2003: 49,000) shares and so diluted earnings per share is also 2.6p (2003:2.2p). 6 months ended 30 November 2004 Earnings No. of shares Per share £'000 '000 p Basic EPS 526 20,211 2.6 Effect of share - 80 - options -------- ------- ------ Diluted EPS 526 20,291 2.6 -------- ------- ------ 6 months ended 30 November 2003 Earnings No. of shares Per share £'000 '000 p Basic EPS 459 20,358 2.3 Effect of share - 49 - options -------- ------- ------ Diluted EPS 459 20,407 2.2 -------- ------- ------ 12 months ended 31 May 2004 Earnings No. of shares Per share £'000 '000 p Basic EPS 3,114 20,358 15.3 Effect of share - 47 - options -------- ------- ------ Diluted EPS 3,114 20,405 15.3 -------- ------- ------ 7 Reconciliation of operating profit to net cash (outflow)/inflow from operating activities: 6 months 6 months ended 12 months ended ended 30 30 November 31 May 2004 November 2003 2004 £'000 £'000 £'000 Operating 1,246 1,075 2,160 profit Deferred income 450 - - Depreciation 817 753 1,482 charge Amortisation of 161 171 280 goodwill Profit on sale of (3) (316) (393) fixed assets Increase in stocks and (5,793) (733) (4,207) work in progress (Increase)/decrease in (693) 1,386 1,120 debtors (Decrease)/increase in (470) (1,469) 2,362 creditors ------- -------- ------ Net cash (outflow)/ (4,285) 867 2,804 inflow from operating ------- -------- ------ activities 8 On 31 May 2004, the group owned 75% of the ordinary share capital of Bushwing Plc and its subsidiaries which, due to the nature of the shareholders agreement governing the operations of Bushwing Plc and its subsidiaries, was included on the balance sheet at 31 May 2004 as a joint venture. On 4 June 2004 the group acquired the remaining 25% ordinary share capital of Bushwing Plc and its subsidiaries for a cash consideration of £2,398,000 (including professional fees) and settlement of loan accounts of £343,000. The assets and liabilities of Bushwing Plc and its subsidiaries acquired were as follows: Book value Adjustments Fair value £'000 £'000 £'000 Tangible fixed 2,226 410 2,636 assets Current assets Stocks 4,459 2,264 6,723 Debtors 4,503 - 4,503 Deposits 3,822 - 3,822 -------- ------- ------ Total 15,010 2,674 17,684 assets -------- ------- ------ Creditors Other 3,726 - 3,726 Borrowings 4,098 - 4,098 Corporation tax 867 - 867 Deferred 16 - 16 tax -------- ------- ------ Total 8,707 - 8,707 liabilities -------- ------- ------ -------- ------- ------ Net assets 6,303 2,674 8,977 -------- ------- ------ Net assets included in investment in joint ventures as at 31 May (6,236) 2004 ------ 2,741 ------ Satisfied by: Cash 2,375 Settlement of loan 343 accounts Professional 23 fees ------ 2,741 ------ Bushwing Plc and its subsidiaries made the following contribution to, and utilisation of, group cashflow: Net cash inflow from operating activities 162 Returns on investment and (11) servicing of finance Taxation (861) Capital expenditure and (10) financial investment ------ Decrease in cash in the (720) period ------ Net cash outflow in respect of the purchase of Bushwing Plc and its subsidiaries: Cash 2,375 consideration Professional fees 23 ------ 2,398 ------ Turnover and operating loss The amounts shown include the following in respect of the acquisition of Bushwing Plc and its subsidiaries: Turnover 284 Cost of (149) sales Operating (476) expenses ------ Operating (341) loss ------ 9 The results for the year ended 31 May 2004 are an abridged version of the statutory accounts for that period on which the auditors gave an unqualified report and which have been filed with the Registrar of Companies. 10 Copies of this interim report are being sent to shareholders on 25 February 2005. Further copies of the interim report are available from the Company Secretary, Pochin's PLC, Brooks Lane, Middlewich, Cheshire, CW10 0JQ. 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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