19th Oct 2006 07:30
Artisan (UK) PLC19 October 2006 19 October 2006 ARTISAN (UK) PLC Trading Update Artisan (UK) plc ("Artisan " or "the Group"), the AIM listed house builder andbusiness park developer today issues the following statement ahead of theInterim results for the six months to 30 September 2006, which it expects torelease on 12 December 2006. The Group has met different market conditions and circumstances for the twodivisions within the Group. Artisan (UK) Developments ("ADL"), the business park division, has enjoyed apositive marketplace during the period, receptive to the quality, presentationand size of product offered. Although achieving a contractual position on mostsales takes longer than expected, the Board is satisfied with the sales andmargins being achieved by this division. However at Rippon Homes, the residential developer, the marketplace is moredifficult. Although our informal surveys of the market suggest that thisdivision is obtaining more than its share of available sales, each sale isproving hard won. As a consequence of relatively static sales prices and morerecently purchased land being utilised, the margins achieved by the Group areaffected adversely. Sourcing new land remains essential to the future development of the Group. Weanticipate that sites currently in the process of negotiation will shortly becontracted and sites that are secured subject to contract will be granted therequired planning permission. We are pleased to report that Rippon Homes nowhas a new land buying team fully in place and we are seeing more opportunitiesfor management to evaluate and tender for land. After some recent success in obtaining new sites for current developments, ADLcontinues to seek new land to provide for the requirement in future years, butis finding fewer suitable sites available for evaluation at present. We haveevaluated some larger sites but they have been discounted because they did notmeet our required rate of return. The market prices for land show no sign of diminishing and this underlines thevalue of the balance sheet assets of the Group. For both residential and commercial sites, obtaining appropriate planningpermission within reasonable timescales continues to be difficult andconsequently slows the acquisition and development of sites. Whilst bothdivisions have made progress, for this very reason some sales expected on newsites for the current period will be deferred and we shall seek improved saleson existing sites. The outlook for the remainder of the 15 month period alsoremains dependent on attracting new sales reservations, particularly newresidential reservations in the first quarter of 2007. The recent rise ininterest rates has not in itself significantly affected the market, but futuredecisions of the Monetary Policy Committee on interest rates could yet bedecisive. As announced by the Chairman in his AGM statement Artisan (UK) plc is changingits basis of accounting from reporting under UK Generally Accepted AccountingPrinciples (UK GAAP) to reporting under International Financial Report Standards("IFRS"). The interim results will be the first period under the newstandards. A consequence of the change to IFRS is that a significant £2.4 minvestment sale which had exchanged at the end of the year to 31 March 2005 butdid not complete until April 2005 is now reflected in the year to 31 March 2006. Also as announced previously the board has decided to move the Group's year endfrom 31 March to 30 June. Following the announcement of the interim report to 30September 2006 as detailed above, the Group will issue a trading updatefollowing the completion of the 3 months trading to 31 December 2006 during thefirst quarter of 2007 and a preliminary statement of the audited results for thefifteen month period to 30 June 2007 by 30 September 2007. A separateannouncement today details the changes required as a result of moving to IFRSand shows the results for the six months to 30 September 2005 and the year ended31 March 2006 restated under IFRS and a reconciliation of the differencesbetween UK GAAP and IFRS. Artisan (UK) plc 01480 436666Chris Musselle, Chief Executive Brewin DolphinIfor Williams 0121 236 7000 Bankside Consultants 020 7367 8888Simon Rothschild/Louise Mason Mobile: 07703 167065 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Artisanal Sp.co