RNS Number:7862B
Eurocity Properties PLC
30 September 2002
ANNOUNCEMENT
Eurocity Properties PLC ("Eurocity" or "the Company")
Eurocity announces its results for the year ended 31 March 2002.
Chairman's Statement
Results
I am very sorry to have to report a loss before tax for the year ended 31 March
2002 of #1,005,000, last year #432,000. This loss includes an exceptional loss
of #419,000, last year nil, which related to costs incurred in an abortive
transaction. The net asset value has fallen to 38.8p per share from 57.7p per
share.
Review
During the year the group sold all but one of the properties held as trading
stock. It also sold three investment properties and acquired five investment
properties increasing the value of the investment portfolio to #10,730,815.
As has been previously stated the company strategy was to look for transactions
that would significantly increase the group's size. This was not successful, it
did not have the support of shareholders, and has resulted in significant costs
being incurred.
Since the year end Baron Bloom and Desmond Bloom have resigned. They were
replaced by Andrew Perloff and Peter Rowson, of Panther Securities PLC, our
largest shareholder. Danny Glasner resigned as a non-executive director, and I
am grateful to him for his support during a most difficult period.
The new directors have rationalised the creditor situation and Panther
Securities PLC have provided financial support to the company. They have also
provided managerial and administrative support free of charge for which I am
most grateful. These actions have enabled the financial situation to be
stabilised. The group is currently trading at a small profit.
Future
It is my belief that the company is too small to prosper as a quoted company and
that a corporate solution should be sought for its future.
Nicholas Jeffrey LLB
Chairman
Chief Executive's Statement
"Never in the field of small property companies has so much been expended by so
few for such little benefit to so many shareholders."
Shareholders will be aware that Peter Rowson and myself were appointed directors
at an EGM requisitioned by Panther Securities PLC of which I am Chairman and
Chief Executive and Peter Rowson is Finance Director. Panther Securities PLC
holds approximately 29% of Eurocity's share capital which makes it the largest
shareholder.
The EGM held on 2 May 2002 was requisitioned because I was dissatisfied with the
excessive costs of managing a small property company such as Eurocity. I am
sorry to say my concerns were fully justified.
The loss for the year ending 31 March 2002 amounts to #1,005,000 of which
#419,000 is directly related to the costs appertaining to the abortive proposal
to acquire Hong Kong companies indirectly owning large development properties in
Central China. This acquisition was effectively blocked by Panther's opposition
to it. Even allowing for this costly fiasco, there are further losses of
#600,000, a large part of which are the massive management expenses of Desmond
and Baron Bloom.
During the year, nine properties were sold. The group disposed of six of its
seven trading properties for a profit on book valuation of #99,000. The group
also sold three commercial properties in Norwich, Aberystwyth and Kirkintilloch
which produced rental income in excess of the mortgage interest. These three
properties were sold for a loss on book valuation of #160,000.
Shortly after Peter Rowson and myself were appointed to the Board, we were
informed that Eurocity (Crawley) Ltd had been seized by the former owner of that
company for failure to pay the deferred consideration of #300,000. We therefore
arranged for Panther Securities PLC to make a secured loan to Eurocity to enable
it to repay its debts and reclaim its assets, such loan being on the same terms
as those agreed by the Vendor, Netcentric PLC, and thus allowing friendly hands
to stand in the stead of Netcentric PLC at no additional cost to Eurocity.
Since taking management control we have looked at every overhead and, where
possible, cut them out so much so that it is anticipated that the next half
yearly figures should show a small profit.
However, whilst we are currently profitable, all properties are mortgaged with
repayment loans and with the mountain of old debt there is a negative cash flow
which we are seeking to address. Whilst we have managed to negotiate reductions
and deferred payments, the debts still have to be paid.
We hope we will be helped in this regard by recovering from the Blooms a
substantial sum which was spent on what the Board considers to be personal
expenses. This sum is in addition to the #55,000 which has just been recovered
from Baron Bloom.
The Company will need extra funds if it is to grow and you may be assured that
your Directors are currently examining available options.
AS Perloff
Managing Director
GROUP PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2002
2002 2001
# #
TURNOVER 2,891,324 531,878
Cost of trading properties sold (1,664,864) -
Direct property expenses (83,986) (39,696)
Administrative expenses:
- Exceptional (418,518) -
- Other (818,918) (591,801)
OPERATING LOSS (94,962) (99,619)
Amounts written off investments - (5,188)
(Loss)/profit on sale of investment properties (160,177) 31,924
Interest receivable 5,983 15,735
Interest payable (756,336) (374,913)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,005,492) (432,061)
Taxation - -
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (1,005,492) (432,061)
LOSS PER SHARE
Basic 18.1p 10.9p
Fully diluted 18.1p 10.9p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 March 2002
2002 2001
# #
Loss for the financial year (1,005,492) (432,061)
Unrealised (deficit)/surplus on revaluation of investment
properties (46,237) 385,508
Total recognised gains and losses relating to the year (1,051,729) (46,553)
NOTE OF HISTORICAL COST PROFITS AND LOSSES
for the year ended 31 March 2002
2002 2001
# #
Loss on ordinary activities before taxation (1,005,492) (432,061)
Realisation of property revaluation gains/(losses) of previous years 337,520 (66,376)
Historical cost loss on ordinary activities before taxation (667,972) (498,437)
Historical cost loss for the year retained after taxation (667,972) (498,437)
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
2002 2001
# #
Loss for the financial period (1,005,492) (432,061)
Other recognised gains and losses relating to the year (46,237) 385,508
New share capital subscribed 300,000 855,000
Share issue expenses - (15,000)
Net (reduction in)/addition to equity shareholders' funds (751,729) 793,447
Opening equity shareholders' funds 3,013,573 2,220,126
Closing equity shareholders' funds 2,261,844 3,013,573
GROUP BALANCE SHEET
31 March 2002
2002 2001
# #
FIXED ASSETS
Tangible assets 10,732,144 9,194,962
CURRENT ASSETS
Stock 229,988 1,842,418
Debtors 320,179 36,560
Investments - 119,442
Cash at bank and in hand 309,651 115,992
859,818 2,114,412
CREDITORS: Amounts falling due within one year (1,853,446) (2,101,746)
NET CURRENT (LIABILITIES)/ASSETS (993,628) 12,666
TOTAL ASSETS LESS CURRENT LIABILITIES 9,738,516 9,207,628
CREDITORS: Amounts falling due after more than one year (7,476,672) (6,194,055)
NET ASSETS 2,261,844 3,013,573
CAPITAL AND RESERVES
Called up share capital 2,912,670 2,612,670
Share premium account 663,581 663,581
Other reserve 53,711 53,711
Revaluation reserve 565,306 949,063
Profit and loss account (1,933,424) (1,265,452)
EQUITY SHAREHOLDERS' FUNDS 2,261,844 3,013,573
NET ASSET VALUE PER SHARE 38.8p 57.7p
GROUP CASH FLOW STATEMENT
For the year ended 31 March 2002
2002 2001
# (restated)
#
Cash flow from operating activities 2,013,472 (58,993)
Returns on investments and servicing of finance (725,929) (359,178)
Taxation - -
Capital expenditure and financial investment (1,297,840) 44,390
Acquisitions (27,110) (1,760,420)
CASH OUTFLOW BEFORE FINANCING (37,407) (2,134,201)
Financing 1,476,261 1,552,816
INCREASE/(DECREASE) IN CASH IN THE PERIOD 1,438,854 (581,385)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2002 2001
# #
Increase/(decrease) in cash in the year 1,438,854 (581,385)
Cash inflow from increase in debt (1,476,261) (4,247,121)
Change in net debt resulting from cash flows (37,407) (4,828,506)
Amortisation of finance costs (24,424) -
MOVEMENT IN NET DEBT IN PERIOD (61,831) (4,828,506)
NET DEBT AT 1 APRIL 2001 (7,551,592) (2,723,086)
NET DEBT AT 31 MARCH 2002 (7,613,423) (7,551,592)
2002 2001
# (restated)
#
Reconciliation of operating loss to net cash flow from operating activities
Operating loss (94,962) (99,619)
Depreciation 796 4,549
Decrease in stocks 1,612,430 -
Increase in debtors (283,619) (720)
Increase in creditors 778,827 36,797
Net cash flow from operating activities 2,013,472 (58,993)
NOTES
1 The financial information set out above does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. The
figures for the year ended 31 March 2002 have been extracted from the audited
annual accounts which received an unqualified auditors' report that did not
contain a statement under section 237 (2) or (3) Companies Act 1985. The
audited statutory accounts will be delivered to the Registrar of Companies in
due course.
The figures for the year ended 31 March 2001 have been extracted from the
audited statutory accounts for that year which have been filed with the
Registrar of Companies and received an unqualified auditors' report which did
not contain a statement under section 237 (2) or (3) Companies Act 1985. Some
of the comparative figures in the cashflow statement and related notes have been
restated to correct an error in the 2001 accounts in connection with the
acquisition of a subsidiary. The effect on the cashflow statement is to reduce
the net cashflow from operating activities and the cash outflow from
acquisitions by #300,000.
2 The Board cannot recommend the payment of a dividend.
3 The accounting policies adopted are consistent with those in previous
years, except with regard to deferred taxation. This change in policy to adopt
FRS 19 "Deferred Taxation" is to comply with accounting best practice. There is
no effect on the current year or prior year figures.
4 The calculation of loss per ordinary share is based upon
the loss after taxation of #1,005,492 and on 5,553,011 being the weighted number
of ordinary shares in issue during the period (2001: loss #432,061 and 3,971,492
being the number of ordinary shares). The warrants have an exercise price above
the fair value of the company's shares and hence are non dilutive.
5 In August 2001, the company issued 600,000 50p ordinary
shares at par as part consideration for the purchase of investment properties by
CJV Properties Limited, a wholly owned subsidiary. In both these cases, the
fair value of the shares was based on independent valuations of the acquired
properties and a report was produced in accordance with section 108 of the
Companies Act 1985.
6 This preliminary announcement was approved by the board on
30 September 2002. Copies of this announcement are available at the office of
the company's nominated adviser, Nabarro Wells & Co Limited (Saddlers House,
Gutter Lane, Cheapside, London EC2V 6BR). The Report and Accounts will be
posted to shareholders today, and copies are available at Panther House 38 Mount
Pleasant,London, WC1X 0AP The Annual General Meeting will be held at the
offices of SJ Berwin & Co, 222 Grays Inn Road, London WC1X 8HB at 12 pm on 27
November 2002.
Enquiries to:
Andrew Perloff, Managing Director Tel: 020 7278 8011
Robert Lo/Keith Smith Tel: 020 7710 7400
Nabarro Wells & Co. Limited - Nominated Adviser
This information is provided by RNS
The company news service from the London Stock Exchange
END
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