27th Feb 2007 07:03
Pochin's PLC27 February 2007 Pochin's PLC Interim results for the 6 months ending 30 November 2006 HIGHLIGHTS • Turnover at £53.2m • Profit before taxation at £4.4m • Interim dividend up 9% to 3.0p • Decrease in pension fund deficit of £2.6m • Healthy contracting order book • Further land sale on Midpoint 18 development • Major joint venture investment in a landmark building in central Liverpool • Investment in a 34 acre property development at Ellesmere, Shropshire • Commitment to further new equipment for Construction Services Chairman's Statement Results The result for the 6 months ended 30 November 2006 show pre-tax profits of £4.4m(2005: £7.4m) on turnover of £53.2m (2005: £74.5m). The result for 2005included the £30m sale of student accommodation developed by the group at CreweGreen. An interim dividend of 3.0p (2005: 2.75p) is declared. Divisional Reports The group has taken action to reduce the deficit in the final salary pensionscheme. All stakeholders have agreed to revised benefits, which will help tosustain the scheme together with special cash contributions from the groupamounting to £1.2m, of which £0.6m was made in the period. The resulting creditof £2m (net) has principally benefited both the Contracting and ConstructionServices Divisions. Contracting Although turnover for the period was slightly ahead of last year's equivalent,this half year was affected by the deferral of a number of projects. Activitylevels have now increased and the forward order book is healthy with a value of£81m (2005: £77m) Construction Services The division performed steadily during the period, and a new venture in NorthernIreland should contribute to improved results. Renewed emphasis is being placedon the efficient utilisation of the group's pumping equipment in marketconditions which remain highly competitive. Property The Property Division continues to perform well in benign market conditions.After falling for a sustained period, investment yields for commercial propertyhave recently stabilised and it remains to be seen how this will affect thedevelopment market. A feature of the period was the sale to The MidpointPartnership (in which Pochin Developments Limited has a 25% interest) of a 30.5acre plot of land on Midpoint 18, where construction of a 350,000 sq. ft. highbay warehouse has now begun. At Crewe, planning permission has been gained fora phased office scheme and a hotel. Permission for a mixed-use scheme is beingsought on the group's new 34 acre site at Ellesmere in Shropshire. A high level of joint venture activity has been maintained during the period.Completion of construction has been achieved of the scheme at Holyhead, wherethe majority of the apartments are now under contract for sale. Progress hasbeen made towards securing the group's participation in a large retail scheme atBirkenhead. Lettings have been completed at Reynolds House at ManchesterTechnopark Limited, a joint venture with Manchester Science Park Limited. Thebuilding will now be offered for sale. Refurbishment of Horton House, Liverpool, a 160,000 sq. ft. central Liverpooloffice and retail building, is making good progress. This project, whichinvolves a substantial pre-let, is being carried out jointly with UK Land andProperty Limited. The same parties are taking forward a number of otherdevelopment opportunities. Residential A positive contribution came from the completion of 19 units in the first 6months. The year's target, over 70 units, remains achievable. It continues tobe difficult to acquire housing sites at a cost which permits profitabledevelopment, so it is good to be able to report the recent purchase of land inShropshire, which should yield 39 new units. Financial Net indebtedness rose by £9.4m to £37.8m, mainly as a result of the group'sinvestment in new projects, referred to above. Increased funding of jointventures reflects the greater level of activity, also referred to above, theeffect of this was largely offset by property disposals and cashflow fromtrading. General I would like to pay tribute to my predecessor, John Woodcock, whom I succeededas chairman on 1st January this year. I am pleased to confirm that he willremain involved with the group's joint venture activity, where his experience,gained over nearly 40 years with Pochin's, will be of great benefit. The group has made a solid start to the second half of the year, which shouldresult in a satisfactory outcome for the full year. Richard FildesChairman26 February 2007 Enquiries: Pochin's PLCDavid Shaw, Chief Executive 01606 833 333John Edwards, Finance Director Charles Stanley SecuritiesPhilip Davies/Rick Thompson 020 7149 6457 Consolidated Income StatementFor the 6 months ended 30 November 2006 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2006 2005 2006 Notes £'000 £'000 £'000 Revenue 3 53,211 74,478 124,295 Cost of sales (45,927) (59,926) (104,096) ------------------ ------------------ ------------------Gross profit 7,284 14,552 20,199 Operating expenses (4,659) (8,413) (14,343)Other operating income 1,985 1,529 3,212Gains on revaluation ofinvestment properties - - 509 ------------------ ------------------ ------------------ Operating profit 4,610 7,668 9,577 Share of loss after taxation injoint ventures (137) (156) (379) Share of profit after taxation inassociates (193) 62 153 Finance income 1,204 808 1,898 Finance cost (1,493) (959) (1,866) ------------------ ------------------ ------------------ Profit before taxation 3 4,377 7,423 9,383 Taxation (1,752) (3,043) (3,551) ------------------ ------------------ ------------------Profit from continuing operations (2,625) 4,380 5,832 Discontinued operationsProfit/(loss) from discontinuedoperations - 13 (2,094) ------------------ ------------------ ------------------Profit for the period 2,625 4,393 3,738 ================== ================== ================== Attributable to: Equity holders of the company 2,611 4,378 3,708Minority interest 14 15 30 ------------------ ------------------ ------------------ 2,625 4,393 3,738 ================== ================== ================== Earnings per share (basic) 6 13.0p 21.7p 18.4pEarnings per share (diluted) 6 12.9p 21.5p 18.2pEarnings per share (basic) fromcontinuing activities 6 13.0p 21.6p 28.8p Earnings per share (diluted) fromcontinuing activities 6 12.9p 21.4p 28.5p Dividends proposed for the period 5 3.0p 2.75p 6.0p Consolidated statement of recognised income and expense 6 months ended 6 months ended 12 months ended 30 November 30 November 31 May 2006 2005 2006 £'000 £'000 £'000 Actuarial losses on defined benefit pension scheme (178) (996) (834)Deferred taxation on pension scheme deficit 53 299 250 ------------------ ------------------ ------------------Net expense recognised directly in equity (125) (697) (584) Profit for the financial period 2,625 4,393 3,738 ------------------ ------------------ ------------------Total gains recognised since last period 2,500 3,696 3,154 ================== ================== ==================Attributable to: Equity holders of the company 2,486 3,681 3,124Minority interest 14 15 30 ------------------ ------------------ ------------------ 2,500 3,696 3,154 ================== ================== ================== Consolidated Balance SheetAs at 30 November 2006 As at As at As at 30 November 30 November 31 May 2006 2005 2006 Notes £'000 £'000 £'000 Non current assetsIntangible assets 242 897 323Property, plant and equipment 5,585 9,254 9,544Investment properties 39,271 34,704 34,923InvestmentsJoint ventures 10,302 7,728 9,128Associates 1,989 2,408 2,378Other 2,157 2,157 2,157 14,448 12,293 13,663 ----------------- ----------------- -----------------Total non current assets 59,546 57,148 58,453 Current assetsInventories 39,832 24,888 26,215Trade and other receivables 20,060 18,918 19,931Cash and cash equivalents 2,670 13,608 791Assets included in disposal group - - 990 ----------------- ----------------- -----------------Total current assets 62,562 57,414 47,927 ----------------- ----------------- -----------------Current liabilitiesTrade and other payables 22,062 17,956 17,948Corporation tax 1,021 3,342 1,245Bank loans 10,822 533 815Bank overdrafts 20,280 23,674 18,672Financial derivatives 222 446 174Obligations under finance leases - 154 -Liabilities included in disposal group - - 665 ----------------- ----------------- -----------------Total current liabilities 54,407 46,105 39,519 ----------------- ----------------- -----------------Net current assets 8,155 11,309 8,408 ----------------- ----------------- ----------------- Non current liabilitiesBank loans 9,211 10,133 9,536Retirement benefit obligation 2,566 5,624 5,179Deferred tax liabilities 2,075 1,190 1,422Long term provisions 1,642 794 1,050Other payables 5,122 3,589 3,856 ----------------- ----------------- -----------------Total non current liabilities 20,616 21,475 21,043 ----------------- ----------------- -----------------Net assets 47,085 46,982 45,818 ================= ================= =================Shareholders' equityShare capital 5,200 5,200 5,200Own shares (954) (847) (954)Revaluation reserve 253 343 270Retained earnings 42,363 42,065 41,093 ----------------- ----------------- -----------------Equity shareholders' funds 46,862 46,761 45,609 Minority interest 223 221 209 ----------------- ----------------- -----------------Total equity 3 47,085 46,982 45,818 ================= ================= ================= Consolidated Cash Flow StatementFor the year ended 30 November 2006 6 months ended 6 months ended 12 months ended 30 November 2006 30 November 2005 31 May 2006 Notes £'000 £'000 £'000 £'000 £'000 £'000 Net cash from operatingactivitiesOperating profit for the period 4,610 7,668 9,577Depreciation charge 489 702 1,381Impairment of intangible assets 81 415 547Charge in respect of sharebased payments 23 14 54 Profit on sale of fixed assets (23) (306) (313)Gains on revaluation of investment properties - - (509)Provision against investmentsin joint ventures 1,500 2,693 2,516 Income from joint ventures andassociates 223 21 44 ------------ ------------ ------------Operating profit beforechanges in working capital 6,903 11,207 13,297 (Increase)/decrease ininventories (13,617) 15,923 14,079 Decrease/(increase) inreceivables 861 (825) (3,438) Increase in payables 2,563 2,205 1,842 ------------ ------------ ------------ (3,290) 28,510 25,780 Interest paid (1,493) (959) (1,866)Income taxes paid (1,277) (1,610) (3,469) ------------ ------------ ------------ Net cash (used in)/fromoperating activities (6,060) 25,941 20,445 Investing activitiesInterest received 1,204 808 1,898Disposal of businesses - - 527Purchase of investmentproperties (258) (4,683) (4,473) Purchase of property, plantand equipment (890) (2,184) (3,789) Proceeds from sale ofproperty, plant and equipment 293 766 808 Receipt of government grants - 140 427Repayment of government grants - (280) (237) Increase in interest in jointventures and associates (2,452) (5,210) (6,831) Purchase of shares by EST - - (107) ------------ ------------ ------------ Net cash used in investingactivities (2,103) (10,643) (11,777) Financing activitiesProceeds from new loans 10,000 - -Repayment of loans (318) (411) (725)Finance lease repayments - (96) (395)Dividends paid 5 (1,248) (1,061) (1,633) ------------ ------------ ------------Net cash from/(used in)financing activities 8,434 (1,568) (2,753) ------------ ------------ ------------Net increase in cash and cashequivalents 271 13,730 5,915 Cash and cash equivalents atbeginning of period (17,881) (23,796) (23,796) ------------ ------------ ------------Cash and cash equivalents atend of period (17,610) (10,066) (17,881) ------------ ------------ ------------ Notes 1 The interim report was approved by the board on 26 February 2007. 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 2006. 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 2006Continuing operations Construction Group Group Contracting Property Residential services management Total £'000 £'000 £'000 £'000 £'000 £'000RevenueExternal 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 associationsNet finance costs - (253) - (36) - (289) ------------ ------------ ------------ ------------ ------------ ------------Profit before taxation 1,168 3,272 57 409 (529) 4,377 ------------ ------------ ------------ ------------ ------------ ------------Taxation (1,752) ------------Profit from continuingoperations 2,625 ------------ Construction Group Group Contracting Property Residential services management Total £'000 £'000 £'000 £'000 £'000 £'000Assets and liabilities Segment assets 23,216 66,899 10,693 9,009 - 109,817Investment in equity accounted joint venturesand associates - 12,291 - - - 12,291 ------------ ------------ ------------ ------------ ------------ ------------Total assets 23,216 79,190 10,693 9,009 - 122,108Total liabilities 19,767 41,623 10,584 3,049 - 75,023 ------------ ------------ ------------ ------------ ------------ ------------Net assets 3,449 37,567 109 5,960 - 47,085 ------------ ------------ ------------ ------------ ------------ ------------Other information Capital expenditure 228 782 - 138 - 1,148Depreciation 36 48 - 405 - 489Profit arising on movement in pension fund deficit 1,250 155 - 275 274 1,954Impairment of investment in joint ventures - 1,500 - - - 1,500Impairment of inventories - - 12 - - 12Impairment of goodwill - - - 81 - 81 6 months ended 30 November 2005 Continuing operations Construction Group Contracting Property Residential services management Group Total £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 32,354 33,587 1,544 6,993 - 74,478Inter-segment sales 6,732 - - 679 - 7,411Eliminations (6,732) 0 0 (679) - (7,411) ------------ ------------ ------------ ------------ ------------ ------------Total revenue 32,354 33,587 1,544 6,993 - 74,478 ------------ ------------ ------------ ------------ ------------ ------------Segment resultOperating profit/(loss) (579) 8,301 13 376 (443) 7,668Share of results of joint ventures and associates - (94) - - - (94)Net finance costs - (95) - (56) - (151) ------------ ------------ ------------ ------------ ------------ ------------Profit/(loss) before taxation (579) 8,112 13 320 (443) 7,423 ------------ ------------ ------------ ------------ ------------Taxation (3,043) ------------Profit from continuing operations 4,380 ------------ Discontinued operations RevenueExternal sales - - - 3,241 - 3,241Inter-segment sales - - - 163 - 163Eliminations - - - (163) - (163) ------------ ------------ ------------ ------------ ------------ ------------Total revenue - - - 3,241 - 3,241 ------------ ------------ ------------ ------------ ------------ ------------Segment resultOperating profit - - - 22 - 22Net finance costs - - - (9) - (9) ------------ ------------ ------------ ------------ ------------ ------------Profit before taxation - - - 13 - 13 ------------ ------------ ------------ ------------ ------------Taxation - ------------Profit from discontinued operations 13 ------------Assets and liabilities Segment assets 14,732 70,775 8,243 10,676 - 104,426Investment in equity accounted joint venturesand associates - 10,136 - - - 10,136 ------------ ------------ ------------ ------------ ------------ ------------Total assets 14,732 80,911 8,243 10,676 - 114,562Total liabilities 12,026 42,396 8,490 4,668 - 67,580 ------------ ------------ ------------ ------------ ------------ ------------Net assets/(liabilities) 2,706 38,515 (247) 6,008 - 46,982 ------------ ------------ ------------ ------------ ------------ ------------Other information Capital expenditure 18 6,448 - 401 - 6,867Depreciation 21 65 - 616 - 702Loss arising on movement in pension fund deficit 83 28 - 55 - 166Impairment of investment in joint ventures - 2,693 - - - 2,693Impairment of inventories - 823 - - - 823Impairment of goodwill - 334 - 81 - 415 12 months ended 31 May 2006Continuing operations Construction Group Contracting Property Residential services management Group Total £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 67,317 35,443 7,738 13,797 - 124,295Inter-segment sales 9,085 - - 1,066 - 10,151Eliminations (9,085) - - (1,066) - (10,151) ------------ ------------ ------------ ------------ ------------ ------------Total revenue 67,317 35,443 7,738 13,797 - 124,295 ------------ ------------ ------------ ------------ ------------ ------------Segment resultOperating profit/(loss) 123 9,836 499 4 (885) 9,577Share of results of joint ventures and associates - (226) - - - (226)Net finance income/(costs) - 135 - (103) - 32 ------------ ------------ ------------ ------------ ------------ ------------Profit/(loss) before taxation 123 9,745 499 (99) (885) 9,383 ------------ ------------ ------------ ------------ ------------Taxation (3,551) ------------Profit from continuing operations 5,832 ------------Discontinued operations RevenueExternal sales - - - 6,490 - 6,490Inter-segment sales - - - 152 - 152Eliminations - - - (152) - (152) ------------ ------------ ------------ ------------ ------------ ------------Total revenue - - - 6,490 - 6,490 Segment resultOperating loss - - - (333) - (333)Net finance costs - - - (17) - (17) ------------ ------------ ------------ ------------ ------------ ------------Loss before taxation - - - (350) - (350) ------------ ------------ ------------ ------------ ------------Loss on disposal of (72)operationProvision against assets (1,777)held in disposal groupTaxation 105 ------------Loss from discontinued operations (2,094) ------------ Assets and liabilities Segment assets 19,393 58,456 6,541 10,484 - 94,874Investment in equity accounted joint venturesand associates - 11,506 - - - 11,506 ------------ ------------ ------------ ------------ ------------ ------------Total assets 19,393 69,962 6,541 10,484 - 106,380Total liabilities 15,781 33,223 6,471 5,087 - 60,562 ------------ ------------ ------------ ------------ ------------ ------------Net assets 3,612 36,739 70 5,397 - 45,818 ------------ ------------ ------------ ------------ ------------ ------------Other information Capital expenditure 37 7,661 - 564 - 8,262Depreciation 44 109 - 1,228 - 1,381Profit arising on movement in pension fund deficit 16 5 - 11 - 32Impairment of investment in joint ventures - 2,516 - - - 2,516Impairment of inventories - 570 - - - 570Impairment of goodwill - 386 - 161 - 547 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 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. 5 Dividends 6 months ended 6 months ended 12 months ended 30 November 2006 30 November 2005 31 May 2006 £'000 £'000 £'000 Interim paid 2.75p per share - - 572Final paid 6.0p (2005: 5.1p) per share 1,248 1,061 1,061 ------------------- ------------------- ------------------- 1,248 1,061 1,633 ------------------- ------------------- ------------------- The interim dividend of 3.0p (2005: 2.75p) per share will be paid on 6 April2007 to shareholders on the register at 7 March 2007. The dividend has not been included as a liability as at 30 November 2006. 6 Earnings per share The calculation of earnings per share (basic and diluted) is based on groupprofit after taxation and minority interests of £2,611,000 (2005 : £4,378,000)and the 20,800,000 ordinary shares of 25p in issue at 30 November 2006 and 30November 2005. The number of shares in the calculation has been reduced at 30 November 2006 forthe 686,000 (2005 : 589,000) shares held in the Employee Share Trust. Basicearnings per share is 13.0p (2005: 21.7p). The assumed conversion of dilutiveoptions increases the number of shares by 168,000 (2005: 194,000) shares and sodiluted earnings per share decreases to 12.9p (2005:21.5p). 6 months ended 30 November 2006 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 2,611 20,114 13Effect of share options - 168 (0.1) --------------------- --------------------- ---------------------Diluted EPS 2,611 20,282 12.9 --------------------- --------------------- --------------------- 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 --------------------- --------------------- --------------------- 12 months ended 31 May 2006 Weighted average Earnings no. of shares Per share £'000 '000 p Basic EPS 3,708 20,154 18.4Effect of share options - 169 (0.2) --------------------- --------------------- ---------------------Diluted EPS 3,708 20,323 18.2 --------------------- --------------------- --------------------- The calculation of earnings per share (basic and diluted) for the group'scontinuing and discontinued operations for the 6 months ended 30 November 2005and 12 months ended 31 May 2006 are set out below. There were no discontinuedoperations for the 6 months ended 30 November 2006: 6 months ended 30 November 2005 Weighted average Earnings no. of shares Per shareContinuing operations £'000 '000 p Basic EPS 4,365 20,211 21.6Effect of share options - 194 (0.2) --------------------- --------------------- ---------------------Diluted EPS 4,365 20,405 21.4 --------------------- --------------------- --------------------- 6 months ended 30 November 2005 Weighted average Earnings no. of shares Per shareDiscontinued operations £'000 '000 p Basic EPS 13 20,211 0.1Effect of share options - 194 - --------------------- --------------------- ---------------------Diluted EPS 13 20,405 0.1 --------------------- --------------------- --------------------- 12 months ended 31 May 2006 Weighted average Earnings no. of shares Per shareContinuing operations £'000 '000 p Basic EPS 5,802 20,154 28.8Effect of share options - 169 (0.3) --------------------- --------------------- ---------------------Diluted EPS 5,802 20,323 28.5 --------------------- --------------------- --------------------- 12 months ended 31 May 2006 Weighted average Earnings no. of shares Per shareDiscontinued operations £'000 '000 p Basic EPS (2,094) 20,154 (10.4)Effect of share options - 169 0.1 --------------------- --------------------- ---------------------Diluted EPS (2,094) 20,323 (10.3) --------------------- --------------------- --------------------- 7. The comparative figures for the year ended 31 May 2006 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 2006, 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. Pochin's PLC ordinary shares of 25p each were admitted into CREST on 29January 2007. 9. Copies of this interim report will be sent to all registered shareholdersduring March 2007. Further copies of the interim report are available from theCompany 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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