24th Feb 2006 09:14
Artisan (UK) PLC24 February 2006 Artisan (UK) plc Trading Statement Artisan (UK) plc, the residential house builder and commercial business parkdeveloper, issues this trading statement in advance of its 31 March 2006 yearend. During the year the housing market proved more volatile than normal, althoughJanuary has started very positively with significantly increased reservationscompared to 2005. After the strong August and September that concluded our firstsix months the quarter leading up to 31 December proved disappointing withrelatively low visitor numbers and reservations. Commercial business park activity remains positive in a generally steady tradingenvironment. We are in the midst of negotiations for sales of buildings with theobjective of contracting these prior to the year end. If current negotiationsremain on target, the division should exceed our expectations for the year. The success we have in bringing the sales currently being agreed in bothresidential and commercial to exchanges prior to the year end will influence theyear end results. Whilst we expect the full year results to show thatresidential volumes will be slightly below those achieved in 2005, margins haveremained robust. Together with the strong performance in our commercialbusiness, the Board is confident of a reasonable outcome for the year, althoughthe outcome will remain dependant upon sales in progress completing prior to theyear end. In order to capitalise on the success achieved in the commercial business andreasonably buoyant local market conditions, the Board has decided to commitfurther investment to expanding its trading activities. The business continuesto progress its land acquisition programme to replace and expand the number ofsites. Additionally the Board considers that Rippon Homes has also suffered frominsufficient land stocks and believes further substantial investment is neededto improve the landbank required to facilitate our growth plans. This willrequire further acquisitions and investment in improving the prospects for someof our current sites. The present landbank of Rippon Homes includes a site of 42 acres nearChesterfield. A professional report has been commissioned to provide an initialassessment of its development potential. The East Midlands Regional Assembly hasrecently commenced consultation as part of the review of the East MidlandsRegional plan. The review is due to be completed by late 2007/early 2008. Themain issues will include the housing requirements across the region as a wholeto 2026, and the housing distribution between districts. Further work will beneeded to demonstrate that the land or part of it may be suitable for futuredevelopment through the Regional Spatial Strategy (RSS). The potential outcomeis uncertain and will require speculative investment and professional advice butthe possibility exists that part of the land may become available fordevelopment and this would significantly improve the value of our holding. In order for the Group to fulfil its growth objectives, the Board is takingsteps to make additional finance available. Discussions with our bankers haveproved encouraging with the prospect of considerably increasing the debt fundingavailable beyond the existing £20 million facility. The Board believe that thecompany should operate at a gearing ratio significantly above the current lowlevel of around 55%.Your Board is very pleased with the manner in which the restructured managementteam is operating under the new Chief Executive and strongly believes that thisadditional finance will stimulate further progress in trading in future years The recent difficult market conditions have demonstrated that, for both Artisan(UK) Developments and Rippon Homes, the inherent quality of the product offeredhas secured sales against competitors' products. Enquiries to:Artisan (UK) plc: Chief Executive 01480 436666Chris Musselle [email protected] Pierce Nominated advisers 020 7107 8000Sarah WharryBankside Consultants Financial PR advisers 020 7367 8888Simon Rothschild 07703 167065 Company website: www.artisan-plc.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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