TIDMSUH

RNS Number : 2279E

Sutton Harbour Group PLC

06 July 2021

6 July 2021

SUTTON HARBOUR GROUP PLC ("the Group")

Results for the year ended 31 March 2021

Sutton Harbour Group plc ("Sutton Harbour", "the Company"), the AIM listed owner and operator of Sutton Harbour in Plymouth and specialist in waterfront regeneration projects and operation of waterfront real estate, marinas and Plymouth Fisheries, announces audited results for the year ended 31 March 2021.

Highlights

-- Net asset value up by GBP1.071m (0.92p.share),despite difficult trading conditions resulting from the Covid-19 pandemic and UK Government imposed restrictions.

-- Record trading year for the marinas as UK based boating becomes more popular, overall 96% occupancy by June 2021.

   --    Investment Property occupancy rate of 97% at 31 March 2021 (95% at 31 March 2020) 

-- Strong recovery parking revenues in summer 2020 after Lockdown ended and same trend now apparent for 2021.

-- The first new development project at Sutton Harbour in a decade, Harbour Arch Quay, due to start on site imminently.

Financial Highlights

 
                                                           Note                     2021                   2020 
            Adjusted (Loss)/profit before                     *              (GBP0.162m)              GBP0.221m 
             tax 
                                              -----------------  -----------------------  --------------------- 
            Net financing costs                                                GBP0.753m              GBP0.844m 
                                              -----------------  -----------------------  --------------------- 
            Net assets                                                          GBP47.2m               GBP46.0m 
                                              -----------------  -----------------------  --------------------- 
            Net asset per share                                                    40.6p                  39.7p 
                                                                 -----------------------  --------------------- 
            Valuation of property portfolio                  **                 GBP47.3m               GBP46.0m 
                                              -----------------  -----------------------  --------------------- 
            Year-end net debt                                                   GBP26.9m               GBP23.5m 
                                                                 -----------------------  --------------------- 
 

*Before accounting for fair value adjustments to property asset valuation.

**Comprises investment and owner occupied portfolios.

Excludes land held as development inventory.

Valuation as at 31 March 2021.

Philip Beinhaker, Executive Chairman, commented:

"The Group has used the last year to advance the development projects, invest in a new development site and develop the marketing and operations efficiencies of the marinas business. The Group now wishes to continue its pace of progress. To support the completion of the Harbour Arch Quay development, provide headroom to invest in other strategic sites and support the costs of planning and professional fees the Group accordingly intends to make an open offer for new equity capital to enable existing shareholders to participate in future growth of the Group in the near future."

For further information, please contact

 
 Sutton Harbour Group plc 
  Philip Beinhaker - Executive 
  Chairman 
  Corey Beinhaker - Chief Operating 
  Officer 
  Natasha Gadsdon - Finance Director    01752 204186 
 Arden Partners (Nomad and Broker) 
  Paul Shackleton 
  Akhil Shah                            020 7614 5924 
 

Executive Chairman's Statement

For Year Ended 31 March 2021

Introduction

I am pleased to report on the Group's results for the year ended 31 March 2021. These results include the impact of the Covid pandemic and periodic UK Government imposed restrictions during the reporting year.

The Group maintained its trading operations throughout the full year. The Covid crisis most acutely undermined the car parking revenues, an important cash generative activity, and throughput was slowed at Plymouth Fisheries as the market for high quality fish reduced in the wake of closures of restaurants and hospitality businesses. Collection of rentals has been steady throughout the year with some tenants arranging instalment payment plans. Overall 90% rentals falling due have been collected and the Group has continued to achieve lettings of vacant space to new tenants with the occupancy rate at 97% by 31 March 2021. The marinas benefitted from the boom in UK based leisure during Summer 2020, a trend that has continued into the Summer 2021 season giving rise to a marinas occupancy rate of 96% by June 2021.

Sutton Harbour is a destination offering outdoor marine, leisure and hospitality facilities. Visitor activity has now returned to the Harbour area with tenants and other operators now attracting strong footfall. In Summer 2020 after the Lockdown restrictions were relaxed, car parking revenues quickly recovered as visitors returned. Unfortunately this recovery was cut short as two further Lockdowns followed. To date, the recovery of Summer 2021 is proceeding strongly as parking incomes and tenants' businesses improve, allowing the Group to move on from the difficulties of the past 16 months. During the year the Company was exposed to the business failure of Edinburgh Woollen Mill, which occupied a 7,500 sq ft unit.

The Group has made significant progress with its stated regeneration business plans. After further delays resulting from the Covid crisis disruption, construction of the 14 apartment building known as Harbour Arch Quay is due to start this summer. In December 2020, the Company completed the purchase of a site just east of the Harbour on Sutton Road and immediately submitted an application for two residential-led developments on this site.

To provide additional headroom on bank facilities to assure the financial resilience of the Group through the post Lockdown recovery period, the increased facility of GBP2m above the core facilities of GBP25m has been successfully extended with National Westminster Bank plc until May 2022.

Results and Financial Position

The adjusted loss before taxation for the year was GBP0.162m (2020: GBP0.221m profit before taxation) which excludes non-cash fair value adjustments. In this financial year these adjustments relate to property asset valuation, undertaken by external valuers as at 31 March 2021. The loss before taxation for the year under review as per the Income Statement, inclusive of the aforementioned adjustments, was GBP2.373m (2020: GBP0.756m loss). The financial impact of the Covid-19 crisis is evident in the Gross Profit which is down by GBP0.567m to GBP1.762m in the year to 31 March 2021 (year to 31 March 2020: GBP2.329m), attributable to a decline of GBP0.294m in car parking; GBP0.146m in marine activities (fisheries and marinas) and GBP0.117m in real estate/regeneration. The Group companies were not eligible for any Covid-19 related Government grants and full functionality of the harbour (fisheries operations, harbour services and 24 hour lock operations) operated continuously to support users due to its status a statutory harbour authority and as part of the food supply chain infrastructure.

Net debt (including lease liabilities) increased to GBP26.874m as at 31 March 2021 from GBP23.549m at 31 March 2020, an increase of GBP3.325m of which GBP2.275m is a loan taken out in December 2020 to finance the purchase of the site on Sutton Road. The increase in development property inventory of GBP4.282m was principally incurred in the purchase of the aforementioned site and costs to prepare the full planning application.

Gearing (Net debt: net assets) as at 31 March 2021 stood at 57.0% (2020: 51.1%). Finance costs of GBP0.753m in the year (2020: GBP0.844m) reflect the lower rates of interest.

As at 31 March 2021, net assets were GBP47.153m (2020: GBP46.082m), a net asset value of 40.6p per ordinary share (2020: 39.7p per ordinary share). The movement includes the valuation of the Group's property assets which gave rise to an overall valuation surplus of GBP1.035m, as reconciled in the table below, of which GBP1.142m deficit relates to the investment property portfolio and GBP2.176m surplus relates to the owner occupied properties. The investment portfolio and car park valuation movements reflect the market uncertainty caused by the UK Government's restrictions to manage the Covid-crisis as at 31 March 2021, with the marinas' valuation surplus following strengthening in trading performance. During the year the new fuel servery at Plymouth Fisheries was completed and accordingly the net cost of GBP0.475m was transferred from 'Assets under the Course of Construction' to the Fisheries asset. The current weaker level of trading at Plymouth Fisheries has informed the valuer's lower overall Fisheries asset value resulting in the effective write down of the fuel servery.

 
                         Valuation Surplus/(Deficit)   Accounting* 
 Owner Occupied 
  Portfolio 
                                         (GBP1.061m)   Fair valuation adjustment recorded in 
        *    Fisheries                                  the Income Statement as no revaluation 
                                                        reserve available to absorb the deficit 
                                           GBP3.563m   Credited to the Revaluation Reserve in 
        *    Marinas                                    the Balance Sheet 
                                         (GBP0.317m)   Debited to the Revaluation Reserve in 
        *    Car Parks                                  the Balance Sheet 
                        ----------------------------  ----------------------------------------- 
 Investment Property                     (GBP1.150m)   Fair valuation adjustment recorded in 
  Portfolio                                             the Income Statement 
                        ----------------------------  ----------------------------------------- 
 TOTAL                                     GBP1.035m 
                        ----------------------------  ----------------------------------------- 
 

*Accounting for the fair value movement between valuations at 31 January 2020 and 31 March 2021 has been accounted in the current year as the movement was materially related to factors that occurred from 1 April 2020.

Taking into account the current level of bank borrowing, the board does not recommend payment of a dividend on the year's results.

Directors and Staff

There have been no other Board changes during the year. Headcount as at 31 March 2021 was 28 (31 March 2020: 30). During the year five staff were furloughed for a very minimal period of time and two redundancies were made. Harbour operations personnel were designated as key workers.

Operations Report

Marine

Sutton Harbour Marina and King Point Marina both enjoyed a record year of annual berth sales with overall annual berth sales up by 5% and overall occupancy up to 92% by 31 March 2021 (80% by 31 March 2020). Total marinas revenue for the year ended 31 March 2021 was slightly up on the previous year, although the overall result was offset by weaker visitor bookings. The current year is set to be another record year with occupancy currently at 96% setting a strong platform for future revenue and valuation growth. Prices have been held this year and will be reviewed as the economy recovers. The marinas have benefited from the renewed popularity of UK based boating since the start of the Covid crisis and it is pleasing to see many first-time boat owners taking up the leisure activity. Demand for berths has justified installation of the final pontoons at a cost of GBP60,000 at King Point Marina making the facility, which opened in 2013, complete. At Sutton Harbour Marina, provision for jet skis has been increased, which was quickly sold out, and improvements to the business' telephony and customer management software have been undertaken.

Plymouth Fisheries trading slowed during the year with both landings of fish and fuel sales impacted by a combination of uncertainty arising from the Covid-19 crisis and Brexit transition, local competition from other south-west ports and a declining local fleet as fishing licences are concentrated to fewer, larger vessels, some which are too large for Sutton Harbour to accommodate. Fishing remains an important component of the Harbour's vibrancy and supports direct and indirect employment. The Group is working closely with Plymouth City Council and other stakeholders on a plan to stimulate Fisheries-related activity through the provision of new facilities which will better meet future needs of the industry and provide public access to and enjoyment of Plymouth's fishing tradition.

Real Estate and Car Parking

Tenant occupancy by 31 March 2021 stood at 97% (31 March 2020: 95%). Following the period of administration and end of their lease, Edinburgh Woollen Mill vacated the 7,500 sq ft premises at the heart of the Barbican at the end of May 2021. 2,500 sq ft is already reserved for a new high quality tenant subject to lease, and the remainder of the space is now being actively marketed.

Car parking revenues were down by half due to the Lockdowns during the year. The multi-storey Harbour Car Park was closed during Lockdown periods due to lack of use and to save business rates. The Group has also incurred security costs to prevent trespass of the car park. Following each Lockdown, and as footfall returned, car parking revenues recovered with the height of Summer 2020 trading at a similar level to Summer 2019.

Regeneration

Sutton Harbour The Group is working diligently with the Local Authority on the finalisation of planning applications for the two buildings on the Sutton Road site. The Group is hopeful of a start on site with the first of the Sutton Road developments in Summer 2022. The smaller Harbour Arch Quay scheme is due to start construction this summer and is due for completion in a year's time. Since the year end the Group has arranged separate development financing, which is subject to completion, to fund the Harbour Arch Quay scheme. Marketing of the 14 high quality waterfront apartments will soon be underway with good levels of informal interest already reported.

Former Airport Site As previously reported the site is safeguarded from development until 2024. The Group has ready proposals for a deliverable alternative use of the 113 acre site which meet the social and economic needs of Plymouth.

Summary and Outlook

The disruption caused by three Lockdowns and restrictions imposed by the UK Government to contain the spread of Covid-19 was more extensive than we foresaw last summer and there is the potential for further interruptions to trading in the future. The Board is now more optimistic that with the vaccination programme well advanced and with businesses finding ways to adapt to different levels of restriction, the Group is well placed to benefit from the re-popularisation of UK based tourism and staycations. This has already been demonstrated by the growth in marina occupancy, recent increase in new lettings and recovery in parking revenues in the post year end period.

The Group has used the last year to advance the development projects, invest in a new development site and develop the marketing and operations efficiencies of the marinas business. The Group now wishes to continue its pace of progress. To support the completion of the Harbour Arch Quay development, provide headroom to invest in other strategic sites and support the costs of planning and professional fees the Group accordingly intends to make an open offer for new equity capital to enable existing shareholders to participate in future growth of the Group in the near future.

Philip Beinhaker

EXECUTIVE CHAIRMAN

5 July 2021

Consolidated Income Statement

For the year ended 31 March 2021

 
                                                                                        2021          2020 
                                                                                      GBP000        GBP000 
 
 
Revenue                                                                                5,400         6,558 
 
Cost of sales                                                                        (3,638)       (4,229) 
 
Gross profit                                                                           1,762         2,329 
                                                                                ------------  ------------ 
 
Fair value adjustments on investment properties and fixed assets                     (2,211)         (977) 
Administrative expenses                                                              (1,171)       (1,264) 
 
Operating (loss)/profit                                                              (1,620)            88 
                                                                                ------------  ------------ 
 
Finance income                                                                             -             - 
Finance costs                                                                          (753)         (844) 
                                                                                ------------  ------------ 
Net finance costs                                                                      (753)         (844) 
                                                                                ------------  ------------ 
 
(Loss) before tax from continuing operations                                         (2,373)         (756) 
Taxation ( charge)/ credit on (l oss) /profit from continuing operations                 198         (232) 
                                                                                ------------  ------------ 
(Loss) for the year from continuing operations                                       (2,175)         (988) 
                                                                                ------------  ------------ 
 
(Loss) for the year attributable to owners of the parent                             (2,175)         (988) 
                                                                                ============  ============ 
 
 
Basic (loss)/earnings per share from continuing operations 
                                                                                     (1.88p)       (0.85p) 
Diluted (loss)/earnings per share from continuing operations                         (1.88p)       (0.85p) 
 
 
Consolidated Statement of Other Comprehensive Income 
 For the year ended 31 March 2021 
                                                                                        2021          2020 
                                                                                      GBP000        GBP000 
 
 
(L oss) for the year                                                                 (2,175)         (988) 
Items that will not be reclassified subsequently to profit or loss: 
Revaluation of property, plant and equipment                                           3,245         1,338 
Items that may be reclassified subsequently to profit or loss: 
Effective portion of changes in fair value of cash flow hedges                             -             - 
 
Other comprehensive income for the year, net of tax                                    3,245         1,338 
                                                                                ------------  ------------ 
 
Total comprehensive income for the year attributable to owners of the parent           1,070           350 
                                                                                ============  ============ 
 
 
Consolidated Balance Sheets 
 As at 31 March 2021 
                                                        2021          2020 
                                                      GBP000        GBP000 
 
Non-current assets 
Property, plant and equipment                         29,766        27,958 
Investment property                                   17,845        18,985 
 Inventories                                          12,962        12,810 
 
                                                      60,573        59,753 
                                                ------------  ------------ 
 
Current assets 
Inventories                                           16,359        12,217 
Trade and other receivables                            2,396         2,595 
Tax recoverable                                            6             5 
Cash and cash equivalents                                928           792 
 
                                                      19,689        15,609 
                                                ------------  ------------ 
 
Total assets                                          80,262        75,362 
                                                ------------  ------------ 
 
Current liabilities 
Trade and other payables                               1,730         1,396 
Lease liabilities                                        141            63 
Deferred income                                        1,819         1,544 
Provisions                                                56            70 
 
                                                       3,746         3,073 
                                                ------------  ------------ 
 
Non-current liabilities 
Bank loans                                            27,475        24,250 
Lease liabilities                                        186            28 
Deferred government grants                               646           646 
Deferred tax liabilities                               1,056         1,254 
Provisions                                                 -            29 
 
                                                      29,363        26,207 
                                                ------------  ------------ 
 
Total liabilities                                     33,109        29,280 
                                                ------------  ------------ 
 
  Net assets                                          47,153        46,082 
                                                ============  ============ 
 
Issued capital and reserves attributable 
 to owners of the parent 
Share capital                                         16,266        16,266 
Share premium                                         10,695        10,695 
Other reserves                                        16,280        13,034 
Retained earnings                                      3,912         6,087 
 
 
  Total equity                                        47,153        46,082 
                                                ============  ============ 
 
 
 
Consolidated Statement 
 of Changes 
 in Equity 
 For the year ended 31 
 March 2021 
 
 
                               Share     Share       Revaluation       Merger      Hedging   Retained    Total 
                             capital   premium           reserve      reserve      reserve   earnings   equity 
                                                  ------------Other reserves------------ 
                              GBP000    GBP000            GBP000       GBP000       GBP000     GBP000   GBP000 
                            --------  --------  ----------------  -----------  -----------  ---------  ------- 
 
Balance at 1 April 
 2019                         16,266    10,695             7,825        3,871            -      7,075   45,732 
 
Comprehensive income 
Loss for the year                  -         -                 -            -            -      (988)    (988) 
Other comprehensive 
 income 
Revaluation of property, 
 plant and equipment               -         -             1,339            -            -          -    1,339 
Total comprehensive 
 income                                                    1,339                         -      (988)      350 
                            --------  --------  ----------------  -----------  -----------  ---------  ------- 
Balance at 31 March 
 2020                         16,266    10,695             9,164        3,871            -      6,087   46,083 
                            --------  --------  ----------------  -----------  -----------  ---------  ------- 
 
 
 
Balance at 1 April 
 2020                         16,266    10,695             9,164        3,871            -      6,087   46,083 
 
Comprehensive income 
Loss for the year                  -         -                 -            -            -    (2,175)  (2,175) 
Other comprehensive 
 income 
Revaluation of property, 
 plant and equipment               -         -             3,245            -            -          -    3,245 
Total comprehensive 
 income                            -         -             3,245            -            -    (2,175)    1,070 
                            --------  --------  ----------------  -----------  -----------  ---------  ------- 
Balance at 31 March 
 2021                         16,266    10,695            12,409        3,871            -      3,912   47,153 
                            ========  ========  ================  ===========  ===========  =========  ======= 
 
 
 
 
Consolidated Cash Flow Statement 
 For the year ended 31 March 2021                   2021          2020 
                                                  GBP000        GBP000 
                                                 -------  ------------ 
Cash used from total operating activities        (2,536)         (455) 
 
 
Cash flows from investing activities 
Net expenditure on investment property              (10)          (52) 
Expenditure on property, plant and equipment       (161)         (823) 
 
Net cash used in investing activities              (171)         (875) 
                                                 -------  ------------ 
 
Cash flows from financing activities 
Interest paid                                      (754)         (844) 
Loan drawdown                                      3,225         1,750 
Lease finance received                               378             - 
Cash payments of lease liabilities                 (142)          (78) 
Grants received                                      136             - 
                                                 -------  ------------ 
Net cash generated from financing activities       2,843           826 
                                                 -------  ------------ 
 
Net increase in cash and cash equivalents            136         (504) 
 
Cash and cash equivalents at beginning of the 
 year                                                792         1,296 
 
Cash and cash equivalents at end of the year         928           792 
                                                 -------  ------------ 
 
 
 
Reconciliation of financing activities for the year ended 31 March 2021 
 
 
                         2021     Cash     2020   Cash flow     2019 
                                  flow 
                       GBP000   GBP000   GBP000      GBP000   GBP000 
                     --------  -------  -------  ----------  ------- 
 Bank loans            25,200     9 50   24,250       1,750   22,500 
 Other loans           2 ,275   2 ,275        -           -        - 
 Lease liabilities       3 27     2 36       91        (78)      169 
                     --------  -------  -------  ----------  ------- 
 Long term debt       2 7,802   3 ,461   24,341       1,672   22,669 
                     --------  -------  -------  ----------  ------- 
 

Segment results

For the year ended 31 March 2021

 
                                        Real 
                            Marine    Estate   Car Parking   Regeneration     Total 
                            GBP000    GBP000        GBP000         GBP000    GBP000 
                          --------  --------  ------------  -------------  -------- 
 Revenue                     3,509     1,542           349              -     5,400 
 
 Segmental Operating 
  Profit before 
  Fair value adjustment 
  and unallocated 
  expenses                     770     1,020           110          (138)     1,762 
 Fair value adjustment 
  on investment 
  properties and 
  fixed assets             (1,061)   (1,150)             -              -   (2,211) 
                          --------  --------  ------------  -------------  -------- 
                                                                                  - 
 Unallocated: 
 Administrative 
  expenses                                                                  (1,171) 
 Operating profit                                                           (1,620) 
 
 Financial income                                                                 - 
 Financial expense                                                            (753) 
                                                                           -------- 
 Profit before 
  tax from continuing 
  activities                                                                (2,373) 
 Taxation                                                                       198 
                                                                           -------- 
 Profit for the 
  year from continuing 
  operations                                                                (2,175) 
                                                                           -------- 
 
 
 Depreciation 
  charge 
 Marine                336 
 Car Parking            31 
 Administration         32 
                      ---- 
                       399 
                      ---- 
 
 
 Year ended 31                          Real 
  March 2020                Marine    Estate   Car Parking   Regeneration     Total 
                            GBP000    GBP000        GBP000         GBP000    GBP000 
                           -------  --------  ------------  -------------  -------- 
 Revenue                     4,323     1,580           655              -     6,558 
 
 Gross profit 
  prior to non-recurring 
  items                        916     1,157           404          (148)     2,329 
 Fair value adjustment 
  on investment 
  properties and 
  fixed assets               (483)     (494)             -              -     (977) 
                           -------  --------  ------------  -------------  -------- 
                                                                              1,352 
 Unallocated: 
  Administrative 
  expenses                                                                  (1,264) 
                                                                                 88 
 Finance income                                                                   - 
 Finance expenses                                                             (844) 
                                                                           -------- 
 Profit before 
  tax from continuing 
  activities                                                                  (756) 
 Taxation                                                                     (232) 
                                                                           -------- 
 

Profit for the year from continuing operations

(988)

 
 
   Depreciation 
   charge 
 Marine                313 
 Car Parking            26 
 Administration          1 
                      ---- 
                       340 
                      ---- 
 

Notes to the Consolidated Financial Statements

1. General Accounting Policies

Basis of preparation

The results for the year to 31 March 2021 have been extracted from the audited consolidated financial statements, which are expected to be published by mid-August 2021.

The financial information set out above does not constitute the Company's statutory accounts for the years to 31 March 2021 or 2020 but is derived from those accounts. Statutory accounts for the year ended 31 March 2020 were delivered to the Registrar of Companies following the Annual General Meeting on 22 September 2020 and the statutory accounts for 2021 are expected to be published on the Group's website (www.suttonharbourholdings.co.uk) shortly, posted to shareholders at least 21 days ahead of the Annual General Meeting ("AGM") to be held on 27 September 2021 and, after approval at the AGM, delivered to the Registrar of Companies.

The auditor, PKF Francis Clark, has reported on the accounts for the year ended 31 March 2021; their report includes a reference to the valuation of Plymouth City Airport (former airport site) to which the auditors drew attention by way of emphasis of matter without qualifying their report.

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