RNS Number:7117M
Pochin's PLC
29 January 2008
Pochin's PLC
Interim results for the 6 months ending 30 November 2007
HIGHLIGHTS
* Turnover up at �54.4m
* Profit before taxation at �2.1m
* Interim dividend maintained at 3.0p
* Pension fund deficit eliminated
* Healthy contracting order book
* Improved performance from Construction Services following reorganisation
Chairman's Statement
Results
The results for the 6 months ended 30 November 2007 show pre-tax profits of
�2.1m (2006: �4.4m) on turnover of �54.4m (2006: �53.2m). The result for 2006
included a pension credit of �2m. An interim dividend maintained at 3.0p (2006:
3.0p) is declared.
Divisional Reports
Contracting
Turnover for the period was ahead of last year's equivalent. The division
carries forward a healthy order book of �88m. A disproportionate number of
projects will complete in the second half of the group's financial year. While
the modest first half loss is disappointing, the result for the year as a whole
will be more acceptable if these projects conclude according to forecast.
Construction Services
This division continued to perform steadily with an improved contribution to the
group's profit. Market conditions remained favourable up to (and beyond) the
half year. As ever, the start of the new calendar year is dependent on
reasonable weather conditions.
Property
During the period, the commercial property market experienced a striking change
in conditions. As foreshadowed in the annual statement and described in the
interim management statement released in November, there has been a marked
adverse shift in property values in general, partly as a result of the
re-assessment of the cost and availability of credit. The volume of reported
market transactions has reduced significantly, and the group has suffered delays
in the completion of a number of important property disposals. As the new terms
for property lending become more perceptible, commercial property transactions
should resume, albeit on a reduced scale.
The group has increased its investment in joint venture projects. It is
pleasing to report that lettings at Manchester Technopark have increased
sufficiently to create additional value which has been reflected in these
results.
Residential
The general slowdown in the housing market has been well publicised, and Pochin
Homes is experiencing reduced levels of demand. Lower interest rates in time
for the Spring season would help stimulate this market.
General
Pochin comprises two trading divisions and two asset based divisions, a
diversity which provides a welcome variety of cash profiles and capital growth
opportunities. The abrupt change in financial markets has brought about a
value adjustment which will test the efficacy of this amalgam. So far, the
trading divisions have performed relatively well, and the strength of the
group's balance sheet will enable it to withstand the effects of the
re-assessment of risk which markets now reflect. Given its well deserved
reputation as an established contractor, and its involvement in high quality
developments, the group is well placed to benefit when more stable market
conditions become established. Further delay in the property disposals referred
to above would have an impact on the final result for the year.
Richard Fildes
Chairman
24 January 2008
Enquiries:
Pochin's PLC
David Shaw, Chief Executive 01606 833 333
John Edwards, Finance Director
Charles Stanley Securities
Philip Davies/Rick Thompson 020 7149 6457
Consolidated Income Statement
For the 6 months ended 30 November 2007
6 months ended 6 months ended 12 months ended
30 November 2007 30 November 2006 31 May 2007
Notes �'000 �'000 �'000
Revenue 3 54,414 53,211 116,554
Cost of sales (50,728) (45,927) (102,219)
------------------ ------------------ ------------------
Gross profit 3,686 7,284 14,335
Operating expenses (5,701) (4,659) (10,621)
Other operating income 2,126 1,985 3,839
Gains on revaluation of investment - - 707
properties
------------------ ------------------ ------------------
Operating profit 111 4,610 8,260
Share of profit/(loss) after taxation 1,940 (137) 45
in joint ventures
Share of profit after taxation in 119 193 241
associates
Finance income 1,394 1,204 2,801
Finance cost (1,470) (1,493) (2,212)
------------------ ------------------ ------------------
Profit before taxation 3 2,094 4,377 9,135
Taxation 48 (1,752) (2,270)
------------------ ------------------ ------------------
Profit from continuing operations 2,142 2,625 6,865
Discontinued operations
Loss from discontinued operations - - (59)
------------------ ------------------ ------------------
Profit for the period 2,142 2,625 6,806
================== ================== ==================
Attributable to:
Equity holders of the company 2,126 2,611 6,775
Minority interest 16 14 31
------------------ ------------------ ------------------
2,142 2,625 6,806
================== ================== ==================
Earnings per share (basic) 6 10.4p 13.0p 33.4p
Earnings per share (diluted) 6 10.4p 12.9p 33.2p
Earnings per share (adjusted) 6 17.9p
Earnings per share (basic) from 6 10.4p 13.0p 33.6p
continuing activities
Earnings per share (diluted) from 6 10.4p 12.9p 33.4p
continuing activities
Dividends proposed for the period 5 3.0p 3.0p 6.25p
Consolidated statement of recognised income and expense
6 months ended 6 months ended 12 months ended
30 November 2007 30 November 31 May
2006 2007
Actuarial gains/(losses) on defined benefit 383 (178) 1,028
pension scheme
Deferred taxation on pension scheme deficit (115) 53 (310)
------------------ ------------------ ------------------
Net income/(expense) recognised directly in 268 (125) 718
equity
Profit for the financial period 2,142 2,625 6,806
------------------ ------------------ ------------------
Total gains recognised since last period 2,410 2,500 7,524
================== ================== ==================
Attributable to:
Equity holders of the company 2,394 2,486 7,493
Minority interest 16 14 31
------------------ ------------------ ------------------
2,410 2,500 7,524
================== ================== ==================
Consolidated Balance Sheet
As at 30 November 2007
As at As at As at
30 November 30 November 31 May
2007 2006 2007
Notes �'000 �'000 �'000
Non current assets
Intangible assets - 242 -
Property, plant and equipment 4,021 5,585 4,400
Investment properties 41,090 39,271 41,090
Investments
Joint ventures 24,704 10,302 11,414
Associates 1,309 1,989 2,037
Other 2,157 2,157 2,157
28,170 14,448 15,608
------------------ ------------------ ------------------
Total non current assets 73,281 59,546 61,098
------------------ ------------------ ------------------
Current assets
Inventories 39,187 39,832 35,638
Trade and other receivables 18,279 20,060 19,030
Cash and cash equivalents 365 2670 223
Financial derivatives 3 0 253
Corporation tax recoverable 612 0 55
------------------ ------------------ ------------------
Total current assets 58,446 62,562 55,199
------------------ ------------------ ------------------
Current liabilities
Trade and other payables 24,289 22,062 24,202
Corporation tax 0 1,021 0
Bank loans 15,800 10,822 10,618
Bank overdrafts 22,587 20,280 11,409
Financial derivatives 0 222 0
------------------ ------------------ ------------------
Total current liabilities 62,676 54,407 46,229
------------------ ------------------ ------------------
Net current (liabilities)/assets (4,230) 8,155 8,970
------------------ ------------------ ------------------
Non current liabilities
Bank loans 8,813 9,211 9,207
Retirement benefit obligation 27 2,566 577
Deferred tax liabilities 2,412 2,075 2,413
Long term provisions 484 1,642 1,632
Other payables 4,757 5,122 4,757
------------------ ------------------ ------------------
Total non current liabilities 16,493 20,616 18,586
------------------ ------------------ ------------------
Net assets 52,558 47,085 51,482
================== ================== ==================
Shareholders' equity
Share capital 5,200 5,200 5,200
Own shares (954) (954) (954)
Revaluation reserve 208 253 240
Retained earnings 47,888 42,363 46,785
------------------ ------------------ ------------------
Equity shareholders' funds 52,342 46,862 51,271
Minority interest 216 223 211
------------------ ------------------ ------------------
Total equity 3 52,558 47,085 51,482
================== ================== ==================
Consolidated Cash Flow Statement
For the year ended 30 November 2007
6 months ended 6 months ended 30 12 months ended 31
30 November 2007 November 2006 May 2007
Notes �'000 �'000 �'000 �'000 �'000 �'000
Net cash from operating activities
Operating profit for the period 111 4,610 8,260
Depreciation charge 363 489 908
Impairment of intangible assets - 81 323
Charge in respect of share based - 23 41
payments
Profit on sale of fixed assets (89) (23) (243)
Gains on revaluation of investment - - (707)
properties
Provision against investments in joint - 1,500 1,500
ventures
Income from joint ventures and 248 223 246
associates
Operating profit before changes in 633 6,903 10,328
working capital
Increase in inventories (3,549) (13,617) (9,423)
Decrease in receivables 751 861 2,065
(Decrease)/increase in payables (1,083) 2,563 2,714
(3,248) (3,290) 5,684
Interest paid (590) (1,493) (1,062)
Income taxes paid (667) (1,277) (2,414)
Net cash (used in)/from operating (4,505) (6,060) 2,208
activities
Investing activities
Interest received 607 1,204 1,121
Purchase of investment properties 0 (258) 0
Purchase of property, plant and (167) (890) (1,880)
equipment
Proceeds from sale of property, plant 272 293 728
and equipment
Receipt of government grants 0 0 150
Increase in interest in joint ventures (10,731) (2,452) (3,234)
and associates
Net cash used in investing activities (10,019) (2,103) (3,115)
Financing activities
Proceeds from new loans 5,000 10,000 (10,000)
Repayment of loans (212) (318) (526)
Dividends paid 5 (1,300) (1,248) (1,872)
Net cash from financing activities 3,488 8,434 7,602
Net (decrease)/increase in cash and (11,036) 271 6,695
cash equivalents
Cash and cash equivalents at beginning (11,186) (17,881) (17,881)
of period
Cash and cash equivalents at end of (22,222) (17,610) (11,186)
period
Notes
1. The interim report was approved by the board on 24 January 2008.
2. Basis of preparation
The interim financial information has been prepared applying the accounting
policies and presentation that were applied in the preparation of the group's
published consolidated financial statements for the year ended 31 May 2007.
3. Segmental information
For management purposes, the group is currently organised into four operating
business segments: Contracting, Property, Residential and Construction Services.
As operations are carried out entirely within the UK, there is no secondary
segmental information.
Inter segmental pricing is done on an arms length open market basis.
6 months ended 30 November 2007
Continuing operation
Construction Group Group
Contracting Property Residential services management Total
�'000 �'000 �'000 �'000 �'000 �'000
Revenue
External sales 42,274 - 4,241 7,899 - 54,414
Inter-segment sales 731 - - 529 - 1,260
Eliminations (731) - - (529) - (1,260)
------------ ------------ ------------ ------------ ------------ ------------
Total revenue 42,274 - 4,241 7,899 - 54,414
------------ ------------ ------------ ------------ ------------ ------------
Segment Result
Operating profit/(loss) (259) 1,054 (295) 468 (857) 111
Share of results of joint
ventures and associates
- 2,059 - - - 2,059
Net finance income/(costs ) 88 (199) 2 6 27 (76)
------------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit before (171) 2,914 (293) 474 (830) 2,094
taxation
------------ ------------ ------------ ------------ ------------ ------------
Taxation 48
------------
Profit from continuing
operations 2,142
------------
Construction Elimination of Group
inter-segment
Contracting Property Residential services items Total
�'000 �'000 �'000 �'000 �'000 �'000
Assets and liabilities
Segment assets 24,239 91,092 13,556 8,220 (31,393) 105,714
Investment in equity - - - -
accounted joint ventures
and associates 26,013 26,013
------------ ------------ ------------ ------------ ------------ ------------
Total assets 24,239 117,105 13,556 8,220 (31,393) 131,727
Segment liabilities 18,469 35,860 5,868 1,365 (31,393) 30,169
Borrowings - 39,866 7,079 255 - 47,200
Taxation 208 1,018 236 338 - 1,800
------------ ------------ ------------ ------------ ------------ ------------
Net assets 5,562 40,361 373 6,262 - 52,558
------------ ------------ ------------ ------------ ------------ ------------
Other information
Capital expenditure 44 - - 123 - 167
Depreciation 37 46 - 280 - 363
6 months ended 30 November 2006
Continuing operations
Construction Group Group
Contracting Property Residential services management Total
�'000 �'000 �'000 �'000 �'000 �'000
Revenue
External sales 36,221 5,343 4,101 7,546 - 53,211
Inter-segment sales 680 - - 455 - 1,135
Eliminations (680) - - (455) - (1,135)
------------ ------------ ------------ ------------ ------------ ------------
Total revenue 36,221 5,343 4,101 7,546 - 53,211
------------ ------------ ------------ ------------ ------------ ------------
Segment Result
Operating profit/(loss) 1,168 3,469 57 445 (529) 4,610
Share of results of joint - 56 - - - 56
ventures and associates
Net finance costs - (253) - (36) - (289)
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) before 1,168 3,272 57 409 (529) 4,377
taxation
------------ ------------ ------------ ------------ ------------ ------------
Taxation (1,752)
------------
Profit from continuing
operations 2,625
------------
Construction Elimination of Group
inter-segment
Contracting Property Residential services items Total
�'000 �'000 �'000 �'000 �'000 �'000
Assets and liabilities
Segment assets 23,216 66,899 10,693 9,009 - 109,817
Investment in equity - 12,291 - - - 12,291
accounted joint ventures
and associates
------------ ------------ ------------ ------------ ------------ ------------
Total assets 23,216 79,190 10,693 9,009 - 122,108
Total liabilities 19,767 41,623 10,584 3,049 - 75,023
Borrowings - 33,649 6,346 318 - 40,313
Taxation (373) 2,943 97 429 - 3,096
------------ ------------ ------------ ------------ ------------ ------------
Net assets 3,449 37,567 109 5,960 - 47,085
------------ ------------ ------------ ------------ ------------ ------------
Other information
Capital expenditure 228 782 - 138 - 1,148
Depreciation 36 48 - 405 - 489
Provision against - 1,500 - - - 1,500
investment in joint
ventures
Impairment of inventories - - 12 - - 12
Impairment of goodwill - - - 81 - 81
12 months ended 31 May 2007
Continuing operations
Construction Group
Contracting Property Residential services management Group Total
�'000 �'000 �'000 �'000 �'000 �'000
Revenue
External sales 82,755 8,613 11,004 14,182 - 116,554
Inter-segment sales 1,201 - - 928 - 2,129
Eliminations (1,201) - - (928) - (2,129)
------------ ------------ ------------ ------------ ------------ ------------
Total revenue 82,755 8,613 11,004 14,182 - 116,554
------------ ------------ ------------ ------------ ------------ ------------
Segment result
Operating profit/(loss) 2,108 6,468 752 154 (1,222) 8,260
Share of results of joint - 286 - - - 286
ventures and associates
Net finance income/(costs) - 658 - (69) - 589
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) before 2,108 7,412 752 85 (1,222) 9,135
taxation
------------ ------------ ------------ ------------ ------------
Taxation (2,270)
------------
Profit from continuing 6,865
operations
------------
Discontinued operations
Segment result
Operating loss - - - (534) - (534)
Loss from discontinued (59)
operations
------------
Construction Elimination of Group
inter-segment
Contracting Property Residential services items Total
Assets and liabilities
Segment assets 25,553 90,865 11,789 7,797 (33,158) 102,846
Investment in equity - 13,451 - - - 13,451
accounted joint ventures
and associates
------------ ------------ ------------ ------------ ------------ ------------
Total assets 25,553 104,316 11,789 7,797 (33,158) 116,297
Segment liabilities 19,864 39,919 3,137 1,461 (33,158) 31,223
Borrowings - 23,102 7,843 289 - 31,234
Taxation 82 1,787 225 264 - 2,358
------------ ------------ ------------ ------------ ------------ ------------
Net assets 5,607 39,508 584 5,783 - 51,482
------------ ------------ ------------ ------------ ------------ ------------
Other information
Capital expenditure 331 1,253 - 296 - 1,880
Depreciation 78 93 - 737 - 908
Provision against - 1,500 - - - 1,500
investment in joint
ventures
Impairment of inventories - 207 - - - 207
Impairment of goodwill - 386 - 323 - 323
4 Taxation
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 lower
than the standard rate of corporation tax in the United Kingdom as a result of
the utilisation of losses in joint venture companies.
5 Dividends
6 months ended 6 months 12 months ended
ended
30 November 2007 30 November 2006 31 May
2007
�'000 �'000 �'000
Interim paid 3.0p per share - - 624
Final paid 6.25p (2006: 6.0p) per 1,300 1,248 1,248
share
------------------- ------------------- -------------------
1,300 1,248 1,872
------------------- ------------------- -------------------
The interim dividend of 3.0p (2006: 3.0p) per share will be paid on 7 April 2008
to shareholders on the register at 8 February 2008.
The dividend has not been included as a liability as at 30 November 2007.
6 Earnings per share
The calculation of earnings per share (basic and diluted) is based on group
profit after taxation and minority interests of �2,126,000 (2006 : �2,611,000)
and the 20,800,000 ordinary shares of 25p in issue at 30 November 2007 and 30
November 2006.
The number of shares in the calculation has been reduced at 30 November 2007 for
the 449,500 (2006 : 686,000) shares held in the Employee Share Trust. Basic
earnings per share is 10.4p (2006: 13.0p). The assumed conversion of dilutive
options increases the number of shares by 38,000 (2006: 168,000) shares and so
diluted earnings per share remains at 10.4p (2006:12.9p).
6 months ended 30 November 2007
Weighted average
Earnings no. of shares Per share
�'000 '000 p
Basic EPS 2,126 20,361 10.4
Effect of share options - 38 -
--------------------- --------------------- ---------------------
Diluted EPS 2,126 20,389 10.4
--------------------- --------------------- ---------------------
6 months ended 30 November 2006
Weighted average
Earnings no. of shares Per share
�'000 '000 p
Basic EPS 2,611 20,114 13.0
Effect of share options - 168 (0.1)
--------------------- --------------------- ---------------------
Diluted EPS 2,611 20,282 12.9
--------------------- --------------------- ---------------------
12 months ended 31 May 2007
Weighted average
Earnings no. of shares Per share
�'000 '000 p
Basic EPS 6,775 20,313 33.4
Effect of share options - 118 (0.2)
--------------------- --------------------- ---------------------
Diluted EPS 6,775 20,431 33.2
--------------------- --------------------- ---------------------
The calculation of earnings per share (basic and diluted) for the group's
continuing and discontinued operations for the 12 months ended 31 May 2007 are
set out below. There were no discontinued operations for the 6 months ended 30
November 2007 and 30 November 2006:
12 months ended 31 May 2007
Weighted average
Earnings no. of shares Per share
Continuing operations �'000 '000 p
Basic EPS 6,834 20,313 33.6
Effect of share options - 118 (0.2)
--------------------- --------------------- ---------------------
Diluted EPS 6,834 20,431 33.4
--------------------- --------------------- ---------------------
12 months ended 31 May 2007
Weighted average
Earnings no. of shares Per share
Discontinued operations �'000 '000 p
Basic EPS (59) 20,313 (0.2)
Effect of share options - 118 -
--------------------- --------------------- ---------------------
Diluted EPS (59) 20,431 (0.2)
--------------------- --------------------- ---------------------
7. The comparative figures for the year ended 31 May 2007 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 2007, which were
prepared under International Financial Reporting Standards 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.
8. Copies of this interim report will be sent to all registered shareholders
during February 2008. 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
IR MGGZMNRDGRZM
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