RNS Number:8972R
Pochin's PLC
28 September 2005
Highlights
Profit before tax increased 14% to #5.8m.
Turnover at record high of #96.1m.
Dividend up 10% to 7.6p.
Diluted earnings per share increased by 8% to 16.5p.
Net assets increased to #50.0m.
Pochin Homes returns its first profit to the group.
Concrete pumping wins "Plant Hirer of the Year" for the third time.
Healthy order book for 05/06.
Enquiries:
John H Woodcock
John Edwards
Pochin's PLC 01606 833 333
Philip Davies
Richard Thompson
Charles Stanley & Co. Limited 020 7739 8200
CHAIRMAN'S STATEMENT
Results and dividends
We are celebrating our 70th year with record results and I am pleased to
announce a growth in turnover to #96.1m (2004: #65.9m) and a 14% increase in
pre-tax profits to #5.8m (2004: #5.1m). A final dividend of 5.1p per share
(2004: 4.65p) is proposed giving a total dividend for the year of 7.6p (2004:
6.9p), a 10% increase on the previous year.
Operations
Property and joint ventures
The property division had an excellent year. In particular our major development
site at Crewe Green is progressing well, where I am pleased to report the sale,
on 23 September 2005, of a 790 student bedroom project occupied by Manchester
Metropolitan University. This sale will make a strong contribution to the
results for the current financial year. I indicated at the interim stage that
we were in the process of selling a number of properties. I am pleased to report
that these planned disposals have now been achieved contributing an operating
profit of #3.3m to the overall result.
Speculative office units have been completed on Midpoint 18 in Middlewich, the
majority of which have been sold. We are now proceeding with the second phase
comprising offices and some industrial units.
Pochin Homes Limited is at an early stage in its planned growth strategy and
completed 28 sales in the year, contributing a small profit to the group. This
is an encouraging performance from the division and, not withstanding a general
slowdown in the housing market, we anticipate sales of 78 homes in the current
year.
Keele Park Developments Limited has now completed its third building and
lettings are proceeding. This building has been designed for use by health
technology (med-tech) companies and has received grant funding from Advantage
West Midlands. In light of the continued success at Keele, we are proceeding
with the construction of a fourth building.
Our policy of forming joint venture companies to expand our development
activities is ongoing and recent commitments include an office development in
Heald Green, Manchester, a refurbishment scheme for a block of apartments in
Liverpool, and a town centre redevelopment in Birkenhead, with plans for a
75,000 square feet food retail unit. Although we do not anticipate these
immediately reflecting in group profits, we are confident they will come to
fruition over the next few years.
Manchester Technopark Limited has had a difficult year, but I am pleased to
report that further lettings in one building have been completed in the second
half, thereby reducing the overall amount of vacant space in the development by
29% and increasing the rent roll by #220,000 p.a., equivalent to c.50% of total
rental capacity. Negotiations are underway with other potential occupiers.
Contracting
The strategy to seek larger projects has proved worthwhile with an increase in
turnover, from #48.9m to #59.2m. Profits were up by 10.6% to #864,000, although
there was a reduction in margin due to higher than anticipated costs of
completing certain projects. The order book is looking very healthy with #68m of
work secured into the current year, including a high proportion of repeat
business from existing clients.
Management has been strengthened during the year and is focused on an
improvement in margins. The major student accommodation project for Manchester
Metropolitan University in Crewe was completed to a demanding timetable and I am
delighted to record this great team effort. I am also pleased to congratulate
the division on receiving an industry award for high standards of quality and a
RoSPA Gold Award for site safety.
Construction services
I am pleased to report that construction services has improved its profit
performance by #1.2m in the year. However, this was a challenging year for the
division. Avoidatrench Limited and Pipeline Drillers Limited were seriously
affected by a lack of infrastructure works across the country and the concrete
pumping division had a disappointing final quarter as workload became scarce.
This downturn, reflected in a fall in the number of jobs carried out, continued
into the first three months of the current year, although I am able to report
that there have been signs of improvement in the latest weekly sales levels.
Despite these uncertain times, the quality of the division has been recognised
and I congratulate everyone involved in winning the Contract Journal "Plant Hirer
of the Year" Award for the third time, in addition to achieving RoSPA safety
awards for Cheshire Concrete Products (gold), Avoidatrench Limited (gold)
and Pochin Concrete Pumping (silver).
Board and senior management changes
In accordance with the group's planned strategic development and board evolution
previously reported I am pleased to announce the appointments of three new
directors to the board.
I am pleased to welcome John Edwards, following his appointment on 22 September
as group finance director. John is a Fellow of The Chartered Institute of
Management Accountants and joined the group as company secretary on 1 August
2005.
I would also like to welcome two new non-executive directors, Nicholas Fry and
Michael Chadwick, who were both appointed with effect from 22 September 2005.
It is the intention that Nicholas Fry, as an independent non-executive director,
will succeed William Underwood as chairman of the audit committee next year.
Michael Chadwick is a substantial shareholder in the company and we therefore do
not regard him as an independent non-executive director, however he brings with
him a wealth of experience from within our industry that I am sure will prove to
be invaluable to the group.
Andrew Waugh, our former company secretary, has moved on to pastures new. I
would like to thank him for his contribution to the company over the last four
years and to wish him well in his future career.
Employees
I would like to recognise the invaluable contribution made by everyone across
the group and to express my sincere thanks to my fellow directors and to all
employees for their enormous efforts. Without their outstanding energy, effort
and enthusiasm across every department these excellent results would not have
been achieved.
Prospects
Looking to the future we are entering a new financial year having completed the
disposal of the major development at Crewe and with further strong development
opportunities, a healthy contracting order book and, despite some softening in
the housing market, there is the expectation of further growth in Pochin Homes
Limited. The construction services division is operating in a difficult market
but is well placed to take full advantage of any upturn. We are continually
reviewing its operations to ensure that it will make satisfactory returns over
the longer term.
I am confident that we are well positioned for the challenges ahead and look
forward to reporting further progress in this coming year.
Consolidated Profit and Loss Account
For the year ended 31 May 2005
2005 2004
Notes #'000 #'000
------------------------------------ ------- -------- --------
Turnover
Group and share of joint ventures 96,750 78,307
Less: share of joint ventures (624) (12,397)
-------- --------
2 96,126 65,910
-------- --------
Continuing operations 89,566 65,910
Acquired operations 3 6,560 -
-------- --------
96,126 65,910
Cost of sales (82,121) (58,178)
-------- --------
Gross profit 14,005 7,732
Operating expenses (11,133) (8,931)
Other operating income 5 3,633 3,359
-------- --------
Operating profit
Continuing operations 5,177 2,160
Acquired operations 3 1,328 -
-------- --------
6,505 2,160
Share of operating (loss) / profit in joint (177) 3,270
ventures
Share of operating profit in associates 496 365
Net interest (1,020) (715)
-------- --------
Profit on ordinary activities before taxation 2 5,804 5,080
Tax on profit on ordinary activities 6 (2,422) (1,938)
-------- --------
Profit on ordinary activities after taxation 3,382 3,142
Equity minority interests (27) (28)
-------- --------
Profit for the financial year 3,355 3,114
Dividends 7 (1,581) (1,435)
-------- --------
Retained profit for the year 1,774 1,679
-------- --------
Earnings per share (basic) 8 16.6p 15.3p
Earnings per share (diluted) 8 16.5p 15.3p
The above figures are for continuing operations.
Statement of Total Recognised Gains and Losses
For the year ended 31 May 2005 2005 2004
#'000 #'000
----------------------------------------------- -------- --------
Profit for the financial year 3,355 3,114
Unrealised surplus / (deficit) on revaluation of 2,409 (104)
investment properties - group
Unrealised surplus on revaluation of investment properties 50 -
- joint ventures
-------- --------
Total recognised gains and losses for the year 5,814 3,010
Prior year adjustment 1 (607) -
-------- --------
Total gains recognised for the year 5,207 3,010
-------- --------
Note of Historical Cost Profits and Losses
For the year ended 31 May 2005 2005 2004
#'000 #'000
------------------------------------------ -------- --------
Reported profit on ordinary activities before taxation 5,804 5,080
Realisation of revaluation surpluses of previous years - 378 242
group
Realisation of revaluation surpluses of previous years - - 641
joint ventures
Difference between historical cost depreciation charge and 40 155
depreciation charge based on revalued amounts
-------- --------
Historical cost profit on ordinary activities before 6,222 6,118
taxation
-------- --------
Historical cost profit retained for the year after 2,192 2,717
taxation, minority interests and dividends
-------- --------
Consolidated Balance Sheet
As at 31 May 2005
2005 2004
(restated)
Notes #'000 #'000
-------------------------- ------- -------- --------
Fixed assets
Intangible assets 1,164 443
Tangible assets 38,253 32,466
Investments
Joint ventures
Share of gross assets 10,286 20,228
Share of gross liabilities (6,006) (11,182)
Goodwill 925 988
-------- --------
5,205 10,034
Associates 2,585 2,547
Other 2,157 2,157
-------- --------
9,947 14,738
-------- --------
49,364 47,647
-------- --------
Current assets
Stocks and work in progress 38,251 20,077
Debtors 22,583 11,342
Investments and deposits 12,901 10,776
Cash at bank and in hand 5 4
-------- --------
73,740 42,199
-------- --------
Creditors: amounts falling due within one year
Borrowings (37,604) (23,313)
Trade and other creditors (19,262) (15,485)
-------- --------
(56,866) (38,798)
-------- --------
Net current assets 16,874 3,401
-------- --------
Total assets less current liabilities 66,238 51,048
Creditors: amounts falling due after more than
one year
Borrowings (10,570) (695)
Other creditors - (233)
-------- --------
(10,570) (928)
Provisions for liabilities and charges (2,020) (1,714)
Accruals and deferred income (3,675) (2,441)
-------- --------
Net assets 2 49,973 45,965
-------- --------
Capital and reserves
Called up share capital 5,200 5,200
Own shares (847) (607)
Revaluation reserve 10,848 8,807
Profit and loss account 34,549 32,357
-------- --------
Equity shareholders' funds 49,750 45,757
Equity minority interests 223 208
-------- --------
49,973 45,965
-------- --------
Consolidated Cash Flow Statement
For the year ended 31 May 2005
2005 2005 2004 2004
Notes #'000 #'000 #'000 #'000
-------------------------------- ------- ------- ------- ------- -------
Net cash (outflow) / inflow from 9 (8,726) 2,804
operating activities
Income received from joint ventures 284 528
Returns on investments and servicing
of finance
Interest received 396 289
Interest paid (807) (427)
Interest paid on finance leases (79) (34)
------ ------
Net cash outflow from returns on (490) (172)
investments and servicing of finance
Taxation
UK corporation tax paid (2,052) (1,191)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (3,677) (4,627)
Receipt of government grants 585 605
Sale of tangible fixed assets 827 835
------- -------
Net cash outflow from capital (2,265) (3,187)
expenditure and financial investment
Acquisitions and disposals
Purchase of subsidiary undertaking 3 (2,741) (13)
Net cash on purchase of subsidiary 3 2,972 -
undertaking
Increase in interest in joint ventures (1,602) (1,531)
and associates
Purchase of goodwill and tangible 4 (2,445) -
fixed assets
Purchase of other fixed asset - (657)
investment
Purchase of own shares (240) -
------- -------
Net cash outflow from acquisitions and (4,056) (2,201)
disposals
Equity dividends paid (1,487) (1,352)
-------- -------
Net cash outflow before financing and (18,792) (4,771)
management of liquid resources
Management of liquid resources
Cash withdrawn at call and short (1,275) (161)
notice ------- ------
Net cash outflow from management of (1,275) (161)
liquid resources
Financing
New loan capital 11,000 800
Repayment of loan capital (4,832) (510)
Repayment of principal under finance (192) (224)
leases and hire purchase contracts ------- ------
Net cash inflow from financing 5,976 66
-------- -------
Decrease in cash in the year (14,091) (4,866)
-------- -------
Reconciliation of net cash flow to
movement in net debt
----------------------------------
Decrease in cash in the year (14,091) (4,866)
Cash inflow from increase in debt and (5,976) (66)
lease financing
Cash outflow from increase in liquid 1,275 161
resources
--------- -------
Change in net debt resulting from cash (18,792) (4,771)
flows
Inception of finance leases - (275)
Bank loans acquired with subsidiary (4,098) -
Deposits acquired with subsidiary 850 13
--------- -------
Movement in net debt in the year (22,040) (5,033)
Opening net debt (13,228) (8,195)
--------- --------
Closing net debt (35,268) (13,228)
--------- --------
Notes
1 Basis of preparation
The financial information has been prepared in accordance with applicable
accounting standards and under the historical cost convention except that
certain tangible fixed assets are shown at their revalued amounts. The
accounting policies have remained unchanged from the previous year apart
from the adoption of UITF38 which results in a prior year adjustment
and the restatement of certain figures.
2 Turnover, profit before taxation and net assets
Segmental analysis of the results is set out below:
Turnover Profit / (loss) before tax Net assets
2005 2004 2005 2004 2005 2004
(restated)
#'000 #'000 #'000 #'000 #'000 #'000
By activity:
Group:
Contracting 59,185 48,927 864 781 (1,898) (3,177)
Construction 18,691 15,625 111 (1,085) 9,424 8,249
services*
Property 18,250 1,358 5,756 2,333 22,346 16,043
Group management cost - - (975) (723) - -
Group interest** - - 262 682 12,311 12,269
-------- ------- ------- ------ ------- -------
96,126 65,910 6,018 1,988 42,183 33,384
-------- ------- ------- ------ ------- -------
Joint ventures and associates***
Property - joint 624 12,397 (458) 2,962 5,205 10,034
ventures
Property - associates - - 244 130 2,585 2,547
------- -------- ------- ------- ------ -------
624 12,397 (214) 3,092 7,790 12,581
------- -------- ------- ------- ------ -------
------- -------- ------- ------- ------ -------
Totals 96,750 78,307 5,804 5,080 49,973 45,965
------- -------- ------- ------- ------ -------
Turnover, profits before tax and net assets are derived from operations
within the United Kingdom.
* Construction services operations include plant hire, concrete block
manufacture and trenchless technology services.
** Borrowings and related interest charges are included under each
activity only where they are identifiable with that activity,
principally property. Group interest includes group investments, cash
resources and those borrowings that are not readily identifiable with
individual activities.
*** Borrowings and related interest charges in joint ventures and
associates are included under property activities.
3 Acquisition of subsidiary undertaking
On 31 May 2004, the group owned 75% of the ordinary share capital of
Bushwing Plc which, due to the nature of the shareholders agreement
governing the operations of Bushwing Plc, 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 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 acquired were as follows:
Book value Adjustments Fair value
#'000 #'000 #'000
Tangible fixed assets 2,226 410 2,636
Current assets
Stocks 4,663 2,060 6,723
Debtors 4,503 - 4,503
Cash at bank and in hand 2,972 - 2,972
Deposits 850 - 850
------- ------- -------
Total assets 15,214 2,470 17,684
------- ------- -------
Creditors
Other 4,153 - 4,153
Borrowings 4,098 - 4,098
Corporation tax 872 - 872
Deferred tax 16 420 436
------- ------- ------
Total liabilities 9,139 420 9,559
------- ------- ------
------- ------- ------
Net assets 6,075 2,050 8,125
------- ------- ------
Goodwill 483
Net assets included in investment in joint ventures as at 31 May 2004 (5,867)
------
2,741
------
Satisfied by:
Cash 2,375
Settlement of loan accounts 343
Professional fees 23
------
2,741
------
Bushwing Plc made the following contribution to, and utilisation of, group cashflow:
Net cash outflow from operating activities (8,455)
Returns on investment and servicing of finance 32
Taxation (992)
Capital expenditure and financial investment 3,244
-------
Decrease in cash in the period (6,171)
-------
Net cash inflow in respect of the purchase of Bushwing Plc:
Cash consideration 2,375
Settlement of loan accounts 343
Professional fees 23
Cash at bank and in hand (2,972)
-------
(231)
-------
Turnover and operating profit
The amounts shown include the following in respect of the acquisition of
Bushwing Plc:
Turnover 6,560
Cost of sales (4,051)
Operating expenses (1,181)
-------
Operating profit 1,328
-------
4 Other acquisition
On 18 June 2004, the group acquired the concrete pumping business of
Balfour Beatty Group Limited, Raynesway Concrete Pumping, for a cash
consideration of #2,445,000 (including professional fees) representing
#1,800,000 in respect of tangible fixed assets and #645,000 in respect of
goodwill. The Raynesway acquisition was successfully integrated into the
business of Pochin Plant Limited and the directors are of the opinion that
its financial impact cannot be assessed on its own.
5 Other operating income
2005 2004
#'000 #'000
Income from property 3,612 3,086
Profit on disposal of land and buildings 21 273
------ ------
3,633 3,359
------ ------
6 Tax on profit on ordinary activities
2005 2004
#'000 #'000
The tax charge is based on the profit for the
year and comprises:
United Kingdom corporation tax at 30% (2004 : 30%) 2,322 706
Adjustments in respect of prior years 9 32
Share of tax charge of joint ventures 1 1,164
Share of tax charge of associates 80 11
------- -------
2,412 1,913
Deferred tax 10 25
------- -------
2,422 1,938
------- -------
The tax assessed for the period is higher than the standard rate of
corporation tax in the United Kingdom.
The differences are explained below:
2005 2004
#'000 #'000
Profit on ordinary activities before taxation 5,804 5,080
------ -------
Profit on ordinary activities multiplied by standard rate of
corporation tax in the United Kingdom of 30% (2004 : 30%) 1,741 1,524
Effects of:
Expenses not deductible for tax purposes 262 282
Impact of fair value adjustment 300 -
Non taxable income in period (31) (86)
Capital allowances for period in excess of (106) (8)
depreciation
Other short term timing differences 96 (17)
Adjustments to tax charge in respect of previous years 9 32
Losses not utilised 141 186
------- -------
Current tax charge for the year 2,412 1,913
------- -------
7 Dividends
2005 2004
#'000 #'000
Interim paid - 2.5p (2004 : 2.25p) 520 468
Final proposed - 5.1p (2004 : 4.65p) 1,061 967
------- -------
1,581 1,435
------- -------
Dividend record date : 7 October 2005.
If the dividend is approved, warrants will be posted on Monday, 7 November
2005, and paid on Tuesday, 8 November 2005.
8 Earnings per share
The calculation of earnings per share (basic and diluted) is based on group
profit after taxation and minority interests of #3,355,000 (2004 :
#3,114,000) and the 20,800,000 ordinary shares of 25p in issue at 31 May
2005 and 31 May 2004. The number of shares used in the calculation has been
reduced at 31 May 2005 for the 589,000 (2004 : 442,000) shares held in the
Employee Share Trust. Basic earnings per share is 16.6p (2004: 15.3p). The
assumed conversion of dilutive options increases the number of shares by
94,000 (2004: 47,000) shares and so diluted earnings per share decreases to
16.5p (2004: 15.3p).
2005 2004
Weighted Weighted
average average
Earnings no. of shares Per share Earnings no. of shares Per share
#'000 000 p #'000 000 p
Basic EPS 3,355 20,262 16.6 3,114 20,358 15.3
Effect of share - 94 0.1 - 47 -
options
------- ------- ------- ------- ------- --------
Diluted EPS 3,355 20,356 16.5 3,114 20,405 15.3
------- ------- ------- ------- ------- --------
9 Reconciliation of operating profit to net cash (outflow) / inflow from
operating activities:
2005 2004
#'000 #'000
Operating profit 6,505 2,160
Depreciation charge 1,576 1,482
Amortisation of goodwill 407 280
Profit on sale of fixed assets (94) (393)
Increase in stocks and work in progress (9,025) (4,207)
(Increase) / decrease in debtors (6,738) 1,120
(Decrease) / increase in creditors (1,357) 2,362
------- --------
Net cash (outflow) / inflow from operating activities (8,726) 2,804
------- --------
10 Additional information
(i) The financial information set out in this announcement does not
constitute the company's statutory accounts for the years ended 31 May
2005 and 2004. The figures for year ended 31 May 2005 and 31 May 2004
are extracted from the statutory accounts which contain an unqualified
audit report and which did not contain a statement under section 237
(2) or (3) of the Companies Act 1985. The 31 May 2004 accounts have
been filed with the Registrar of Companies, however, the 31 May 2005
accounts are yet to be filed.
(ii)The Annual General Meeting will be held at the company's offices at
Brooks Lane, Middlewich, Cheshire at 12.00 noon on Friday, 4 November
2005. The full report will be posted to shareholders on 6 October
2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PUUPWBUPAGAR
Pacific Global (LSE:PCH)
Historical Stock Chart
From Jan 2025 to Feb 2025
Pacific Global (LSE:PCH)
Historical Stock Chart
From Feb 2024 to Feb 2025
