RNS Number:9487Y
Pochin's PLC
27 February 2006
Pochin's PLC
Interim Results for the six months ended 30 November 2005
Highlights
*Turnover up 70% at #77.7m (2004: #45.7m)
*Profit before taxation increased to #7.43m (#0.54m)
*Interim dividend up 10% to 2.75p (2004:2.5p)
*Disposal of purpose built student accommodation at Crewe Green
*Healthy Contracting order book
Chairman's Statement
Results and Dividends
I am pleased to announce an exceptional half-year result, with profits before
taxation of #7.43m (30 November 2004: #0.54m) on turnover of #77.7m (30 November
2004: #45.7m). The board recommend an increased interim dividend of 2.75p per
share (2004: 2.5p per share) on earnings per share of 21.7p (30 November 2004:
2.1p).
The exceptional result was derived from property sales, the most significant
being the sale of the student accommodation development, pre-let to the
Manchester Metropolitan University at Crewe, ("Crewe Green development") which
we announced in October last year.
These are the first results of the Company published under International
Financial Reporting Standards. Further details are given in the Group Finance
section below.
Trading
Contracting
The secured order book remains healthy, at #77m for the year. Profitability was
affected in the first half as circumstances outside our control led to the
deferment of a number of key contracts. These have now recommenced and as a
result we anticipate a significantly stronger performance in the second half.
Construction Services
This division has maintained its progress in terms of profit performance,
following action taken in the second half of last year to reduce costs and
improve margins. The scarcity of infrastructure works referred to in my
statement accompanying the annual results remains and consequently certain parts
of the division continue to experience difficult trading conditions.
Property and Joint Ventures
Property sales in the first six months have produced an excellent return for the
Group. We do not anticipate any significant property sales during the second
half of the year, although progress is being made on a number of new
developments that are at an early stage and should come to fruition in the next
few years. Since my last report, in line with our stated policy, we have
invested in further joint venture projects at Deeside and Holyhead and look
forward to working with our partners to secure healthy returns in future years.
I am pleased to report an increase in general enquiry levels for the empty space
in the buildings developed by Manchester Technopark Limited, our joint venture
with Manchester Science Park Limited.
Residential
The growth of Pochin Homes has continued with the opening up of two new sites.
Despite the general slowdown in the market, a small profit has been achieved and
we anticipate higher levels of sales in the second half, although there could be
a shortfall on our stated target of 78 sales for the year.
Group Finance
I advise that European Union listed companies are now required to prepare
consolidated financial statements in accordance with International Financial
Reporting Standards (IFRS). Consequently, in conjunction with this statement we
have issued a report to the London Stock Exchange that provides financial
information showing the impact of the group's transition from a UK Generally
Accepted Accounting Principals (UK GAAP) basis to an IFRS basis. The adoption of
IFRS will have no impact upon the underlying cash flows from trading activities
of the group, but it will impact on the timing of both revenue and profit.
Inventories reduced in the period by #15.9m following completion and subsequent
sale of the Crewe Green development. The proceeds from that sale were used, in
part, to increase investment in new development opportunities by #6.9m, most
noticeably at Keele, Deeside and Crewe Green and to extend our joint venture
activity by a further #5.2m particularly with new partners at Deeside and
Birkenhead. The remaining income was used to reduce net borrowings, which at 30
November 2005 were #21.0m (31 May 2005: #35.6m).
Prospects
Whilst no material property sales are anticipated, improved performances from
the trading divisions should add to these results during the remainder of the
financial year.
Directors
At the end of 2005, whilst on holiday, Peter Dickson died in a tragic accident.
Peter was non-executive deputy chairman of the company, having joined the Board
in January 2002, and was hugely valued as a member of the team. We shall miss
him greatly. I would again like to extend our deepest sympathy to Mrs Dickson
and family.
John Woodcock
Chairman
27 February 2006
Enquiries:
Pochin's PLC
David Shaw, Chief Executive 01606 833 333
Charles Stanley Securities
Philip Davies/Rick Thompson 020 7953 2000
Consolidated income statement
Restated Restated
6 months ended 6 months ended 12 months ended
30 November 30 November 31 May
2005 2004 2005
Notes #'000 #'000 #'000
Revenue 5 77,719 45,709 93,886
Cost of sales (62,537) (40,900) (81,420)
---------------- ---------------- ----------------
Gross profit 15,182 4,809 12,466
Operating expenses (9,021) (5,601) (11,224)
Other operating income 1,529 1,775 3,633
Gains on revaluation
of investment
properties - - 2,459
---------------- ---------------- ----------------
Operating profit 7,690 983 7,334
Share of profit/(loss)
after taxation in
joint ventures 4 (144) (178)
Share of profit after
taxation in associates 165 139 417
Finance income 817 794 1,339
Finance cost (1,240) (1,234) (2,804)
---------------- ---------------- ----------------
Profit before taxation 5 7,436 538 6,108
Taxation (3,043) (91) (2,034)
---------------- ---------------- ----------------
Profit on ordinary
activities after 4,393 447 4,074
taxation
========= ========= =========
Attributable to:
Equity holders of the
company 4,378 434 4,047
Minority interest 15 13 27
---------------- ---------------- ----------------
Retained profit for
the period 4,393 447 4,074
========= ========= =========
Earnings per share 8 21.7p 2.1p 20.0p
(basic)
Earnings per share 8 21.5p 2.1p 19.9p
(diluted)
Dividends proposed for 7 2.75p 2.50p 5.10p
the period
Consolidated statement of recognised income and expense
Restated Restated
6 months ended 6 months ended 12 months ended
30 November 30 November 31 May
2005 2004 2005
Actuarial losses on
defined benefit
pension scheme 996 1,244 627
Deferred taxation on
pension scheme deficit (299) (373) (188)
---------------- ---------------- ----------------
Net expense recognised
directly in equity (697) (871) (439)
Profit for the
financial period 4,393 447 4,074
---------------- ---------------- ----------------
Total gains/(losses)
recognised since last
period 3,696 (424) 3,635
========= ========= =========
Attributable to:
Equity holders of the
company 3,681 (437) 3,608
Minority interest 15 13 27
---------------- ---------------- ----------------
3,696 (424) 3,635
========= ========= =========
Consolidated Balance Sheet
Restated Restated
As at As at As at
30 November 30 November 31 May
2005 2004 2005
Notes #'000 #'000 #'000
Non current
assets
Intangible
assets 897 1,056 1,312
Property, plant
and equipment 9,254 17,579 8,232
Investment
properties 34,704 21,118 30,021
Investments
Joint ventures 7,728 3,210 5,205
Associates 2,408 2,564 2,585
Other 2,157 2,157 2,157
12,293 7,931 9,947
------------------- ------------------- ----------------
Total non
current assets 57,148 47,684 49,512
------------------- ------------------- ----------------
Current assets
Inventories 24,888 33,724 40,811
Trade and other
receivables 18,918 14,823 18,093
Cash and cash
equivalents 13,608 11,521 12,906
------------------- ------------------- ----------------
Total current
assets 57,414 60,068 71,810
------------------- ------------------- ----------------
Total assets 114,562 107,752 121,322
=========== =========== ===========
Equity
Share capital 5,200 5,200 5,200
Own shares (847) (847) (847)
Revaluation
reserve 343 814 596
Retained
earnings 42,065 35,485 39,237
------------------- ------------------- ----------------
Equity 46,761 40,652 44,186
shareholders
funds
Minority 221 211 223
interest
------------------- ------------------- ----------------
Total equity 5 46,982 40,863 44,409
=========== =========== ===========
Non current
liabilities
Bank loans 10,133 10,172 10,351
Retirement
benefit
obligation 5,624 4,932 4,391
Deferred tax
liabilities 1,190 867 1,385
Long term
provisions 794 753 712
Obligations
under finance
leases 145 792 219
Other payables 3,589 3,416 3,675
------------------- ------------------- ----------------
Total non
current
liabilities 21,475 20,932 20,733
=========== =========== ===========
Current
liabilities
Trade and other
payables 17,956 18,134 16,260
Tax liabilities 3,342 287 1,941
Obligations
under finance
leases 154 253 176
Bank loans and
overdrafts 24,207 27,283 37,428
Financial
derivatives 446 - 375
------------------- ------------------- ----------------
Total current
liabilities 46,105 45,957 56,180
------------------- ------------------- ----------------
Total
liabilities 67,580 66,889 76,913
------------------- ------------------- ----------------
Total equity and
liabilities 114,562 107,752 121,322
=========== =========== ===========
Consolidated Cash Flow Statement
6 months ended Restated Restated
6 months ended 12 months ended
30 November 2005 30 November 2004 31 May 2005
Notes #'000 #'000 #'000 #'000 #'000 #'000
Net cash from
operating
activities
Operating 7,619 983 4,500
profit for the
year
Depreciation 702 817 1,577
charge
Impairment of 415 95 258
intangible
assets
Profit on sale (306) (3) (94)
of fixed
assets
Write off of 2,693 - -
investments in
joint ventures
Income from 21 31 284
joint ventures
------------ ------------ ------------
Operating
profit before 11,144 1,923 6,525
changes in
working
capital
Decrease/ 15,923 (5,065) (9,726)
(increase) in
inventories
Increase in (825) (1,228) (4,498)
receivables
Increase/ 2,204 183 (743)
(decrease) in
payables
------------ ------------ ------------
Cash generated 28,446 (4,187) (8,442)
from
operations
Interest paid (367) (502) (886)
Income taxes (1,610) (1,213) (2,052)
paid
------------ ------------ ------------
Net cash used 26,469 (5,902) (11,380)
in operating
activities
Investing
activities
Interest 280 349 396
received
Purchase of - (2,741) (2,741)
subsidiary
undertaking
Purchase of
investment (6,867) (2,238) (3,677)
property,
property and
plant
Proceeds from
sale of 766 199 827
investment
property,
property and
plant
Receipt of 140 354 585
government
grants
Repayment of (280) - -
government
grants
Net cash on
purchase of - 2,972 2,972
subsidiary
undertaking
(Increase)/
decrease in (5,210) 450 (1,602)
interest in
joint ventures
and associates
Purchase of - (2,445) (2,445)
unincorporated
businesses
Purchase of - (240) (240)
own shares
Cash
(withdrawn)/ (699) 108 (1,275)
deposited at
call and short
notice
------------ ------------ ------------
Net cash used (11,870) (3,232) (7,200)
in investing
activities
Financing
activities
Proceeds from - 10,430 11,000
issue of loan
capital
Payment of (411) (310) (4,832)
loan capital
Payment of (96) (113) (192)
finance lease
liabilities
Dividends paid 7 (1,061) (967) (1,487)
------------ ------------ ------------ ------------
Net cash from (1,568) 9,040 4,489
financing
activities
Net increase/
(decrease) in 13,031 (94) (14,091)
cash and cash
equivalents
Cash and cash
equivalents at (36,698) (22,607) (22,607)
beginning of
year
------------ ------------ ------------
Cash and cash
equivalents at (23,667) (22,701) (36,698)
end of year
======= ======= =======
Notes
1. The interim report was approved by the board on 24 February 2006.
2. Transition to IFRS
All listed companies in the European Union are required to present their
consolidated financial statements for accounting periods beginning on or after 1
January 2005 in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union. As a result, the group's consolidated
financial statements for the year ending 31 May 2006 will be presented on this
basis with IFRS comparative figures. These interim financial statements have
been prepared on the basis of the IFRS accounting policies expected to be
adopted in the year-end consolidated financial statements.
The group's transition date for adoption of IFRS is 1 June 2004. This date has
been selected in accordance with IFRS1, "First time adoption of International
Financial Reporting Standards".
Prior to the adoption of IFRS, the financial statements of Pochin's PLC had been
prepared in accordance with United Kingdom Generally Accepted Accounting
Principles (UK GAAP). UK GAAP differs in certain respects from IFRS and certain
accounting, valuation and consolidation methods have been amended, when
preparing these financial statements, to comply with IFRS. The comparative
figures in respect of 30 Novemvber 2004 and 31 May 2005 have been restated to
reflect these amendments. Reconciliation and description of the effect of the
transition from UK GAAP to IFRS on the group's reported financial position and
financial performance are set out in note 4.
A detailed review of the changes in our accounting policies and reconciliations
of our financial statements from UK GAAP to IFRS at key dates has been published
to the London Stock Exchange on 27 February 2006 and is available on the group's
website (www.pochins.plc.uk).
3 Principal accounting policies
The accounting policies that the group intends to apply for the year ended 31
May 2006 are set out in the document referred to in note 2 above.
4 Reconciliation between UK GAAP and IFRS
The principal changes arising from the presentation of the 30 November 2004 and
31 May 2005 results under IFRS are:
(a) Profit before tax 6 months ended 12 months ended
30 November 2004 31 May
2005
#'000 #'000
As previously reported under UK GAAP 870 5,804
Impairment of intangible assets 66 148
Movement in pension scheme deficit (209) (285)
Share based payments (10) (24)
Recognition of property sales based on
completion of contract (145) (1,539)
Joint venture and associate share of (34) (80)
taxation
Provision for loss on interest rate swap - (375)
Revaluation gains on investment properties
reported as income - 2,459
------------------ -----------------
IFRS profit before tax 538 6,108
========== ==========
(b) Taxation 6 months ended 12 months ended
30 November 2004 31 May 2005
#'000 #'000
Current tax
As previously reported under UK
GAAP 331 2,298
Joint venture and associate share
of taxation (34) (80)
------------------ ------------------
As restated under IFRS 297 2,218
Deferred tax
As previously reported under UK - 124
GAAP
Investment property (surpluses)/
deficits (96) 360
Pension scheme deficit (63) (86)
Share based payments (3) (7)
Property sales (44) (462)
Interest rate swap - (113)
------------------ ------------------
As restated under IFRS (206) (184)
------------------ ------------------
Taxation as restated under IFRS 91 2,034
------------------ ------------------
(c) Profit after tax 6 months ended 12 months ended
30 November 2004 31 May 2005
#'000 #'000
As previously reported under UK
GAAP 539 3,382
IFRS adjustments to profit before
taxation (332) 304
IFRS adjustments to taxation 240 388
------------------ ------------------
IFRS profit after tax 447 4,074
------------------ ------------------
(d) Net assets 6 months ended 12 months ended
30 November 2004 31 May 2005
#'000 #'000
As previously reported under UK
GAAP 46,581 49,973
Impairment of intangible assets 66 148
Pension scheme deficit (3,452) (3,074)
Recognition of property sales based
on completion of contract (375) (1,351)
Deferred tax on investment property
surpluses (1,630) (2,086)
Proposed dividend adjustment 520 1,061
Purchase of own shares (847) -
Provision for loss on interest rate
swap - (262)
------------------ ------------------
Restated under IFRS 40,863 44,409
------------------ ------------------
5. Segmental information by activity:
Restated Restated
6 months ended 6 months ended 12 months ended
30 November 30 November 31 May
2005 2004 2005
#'000 #'000 #'000
Revenue
Contracting 32,354 33,553 59,185
Construction services 10,234 9,725 18,691
Property 33,587 2,265 13,003
Residential 1,544 166 3,007
------------------- ------------------- -------------------
77,719 45,709 93,886
------------------- ------------------- -------------------
Profit/(loss) on
ordinary activities
before taxation
Contracting (579) 483 710
Construction services 331 200 138
Property 7,792 180 5,967
Residential 13 (162) 6
Group management cost (443) (487) (975)
Group interest 322 324 262
------------------- ------------------- -------------------
7,436 538 6,108
------------------- ------------------- -------------------
Net assets
Contracting 2,707 3,197 4,624
Construction services 6,008 5,918 5,784
Property 26,070 19,255 21,892
Residential (247) (367) (202)
Group interest 12,444 12,860 12,311
------------------- ------------------- -------------------
46,982 40,863 44,409
------------------- ------------------- -------------------
Turnover, profit/(loss) before taxation and net assets are derived from
operations within the United Kingdom.
6. The taxation charge is calculated by applying the estimated effective annual
tax rate to the profit for the period. The tax assessed for the period is higher
than the standard rate of corporation tax in the United Kingdom as a result of
expenses not deductible for tax purposes and interest charges and losses in
joint venture companies not utilised.
7. Dividends
Restated Restated
6 months ended 6 months ended 12 months ended
30 November 2005 30 November 2004 31 May
2005
#'000 #'000 #'000
Interim paid 2.50p - - 520
per share
Final paid 5.10p 1,061 967 967
(2004: 4.65p) per
share
------------------- ------------------- -------------------
1,061 967 1487
------------------- ------------------- -------------------
8. The calculation of earnings per share (basic and diluted) is based on group
profit after taxation and minority interests of #4,378,000 (2004 : #434,000
restated) and the 20,800,000 ordinary shares of 25p in issue at 30 November 2005
and 30 November 2004. The number of shares in the calculation has been reduced
at 30 November 2005 for the 589,000 (2004 : 589,000) shares held in the Employee
Share Trust. Basic earnings per share is 21.7p (2004: 2.1p restated). The
assumed conversion of dilutive options increases the number of shares by 194,000
(2004: 80,000) shares and so diluted earnings per share decreases to 21.5p
(2004:2.1p restated).
6 months ended 30 November 2005
Weighted average
Earnings no. of shares Per share
#'000 '000 p
Basic EPS 4,378 20,211 21.7
Effect of share
options - 194 0.2
--------------------- --------------------- ---------------------
Diluted EPS 4,378 20,405 21.5
--------------------- --------------------- ---------------------
Restated
6 months ended 30 November 2004
Weighted average
Earnings no. of shares Per share
#'000 '000 p
Basic EPS 434 20,211 2.1
Effect of share
options - 80 -
--------------------- --------------------- ---------------------
Diluted EPS 434 20,291 2.1
--------------------- --------------------- ---------------------
Restated
12 months ended 31 May 2005
Weighted average
Earnings no. of shares Per share
#'000 '000 p
Basic EPS 4,047 20,262 20.0
Effect of share
options - 94 0.1
--------------------- --------------------- ---------------------
Diluted EPS 4,047 20,356 19.9
--------------------- --------------------- ---------------------
9. The comparative figures for the year ended 31 May 2005 do not constitute
statutory accounts for the purpose of section 240 of the Companies Act 1985. A
copy of the statutory accounts for the year ended 31 May 2005, which were
prepared under UK GAAP and which the auditors gave an unqualified report in
accordance with section 235 of the Companies Act 1985, have been filed with the
Registrar of Companies.
10. Copies of this interim report are being sent to shareholders on 2 March
2006. Further copies of the interim report are available from the Company
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 Exchange
END
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