TIDMTEF
RNS Number : 7790X
Telford Homes PLC
29 November 2017
Press Release 29 November 2017
Telford Homes Plc
("Telford Homes" or the "Group")
Interim Results
Telford Homes Plc (AIM:TEF), the residential property developer
focused on non-prime London, today announces its interim results
for the six months ended 30 September 2017 ("H1 2018").
Highlights
-- Well positioned to meet market expectations for the full year
to 31 March 2018 with over 95 per cent of gross profit secured
-- Total forward sales, to be recognised this financial year and beyond, of over GBP580 million
-- The structural shortage of homes to buy and rent in non-prime
areas of London continues to underpin the Group's longer term
growth plans
-- Substantial development pipeline of over GBP1.4 billion of
future revenue comprising of just under 4,200 homes
-- As anticipated, due to development timings, profit before tax
for H1 2018 was GBP8.7 million, slightly lower than the equivalent
period last year (H1 2017: GBP9.0 million)
-- Completions are proceeding as planned with no unexpected delays
-- Increased institutional demand in the build to rent sector,
where margins continue to exceed Group targets
-- Telford Homes recognised as a desirable build to rent partner
by multiple potential investors
-- Increased interim dividend by 11.1 per cent to 8.0 pence (H1 2017: 7.2 pence)
-- Announced appointment of a new Group Land & Planning
Director, Jerome Geoghegan, expected to join the Board in January
2018 from L&Q Housing Group
-- On track to deliver over GBP40 million profit before tax for
FY 2018 and secured over 65 per cent of the gross profit required
to exceed GBP50 million in FY 2019
Jon Di-Stefano, Chief Executive of Telford Homes, commented:
"Telford Homes is firmly on track to deliver profit before tax
in excess of GBP40 million for the year to 31 March 2018, in line
with market expectations, having secured over 95 per cent of
anticipated gross profit. The Board is very happy with the current
position of the business and our move into build to rent is a
significant part of our long term strategy as we continue to
develop homes in non-prime locations across London.
"We have a development pipeline of nearly 4,200 homes, worth
GBP1.4 billion, set to be delivered into an undersupplied London
market over the next few years. We are confident that we can
deliver on our aspirations and continue to grow Telford Homes in
order to secure long term value for our shareholders."
- Ends -
For further information:
Telford Homes Plc
Jon Di-Stefano, Chief Executive Tel: +44 (0) 1992
Katie Rogers, Group Financial 809 800
Director www.telfordhomes.london
Guy Lambert, Head of Corporate
Communications
Shore Capital - Nomad and
Joint Broker
Dru Danford / Patrick Castle Tel: +44 (0) 20
7408 4090
Peel Hunt LLP - Joint Broker
Charles Batten / Capel Irwin Tel: +44 (0) 20
7418 8900
Media enquiries:
Buchanan
Henry Harrison-Topham / Tel: +44 (0) 20
Victoria Hayns 7466 5000
Steph Watson / Catriona www.buchanan.uk.com
Flint
telfordhomes@buchanan.uk.com
Copies of this announcement are available from the Group at
Telford House, Queensgate, Britannia Road, Waltham Cross,
Hertfordshire EN8 7TF and on our website
www.telfordhomes.london
CHIEF EXECUTIVE'S STATEMENT
Telford Homes is well positioned to meet market expectations for
the full year to 31 March 2018 with over 95 per cent of anticipated
gross profit already secured and total forward sales, including the
revenue recognised in the first half of the year, in excess of
GBP580 million. We have a development pipeline of almost 4,200
homes set to be delivered into an undersupplied market with London
in desperate need of greater investment in housebuilding. We are
successfully selling homes to a diverse mix of customers including
build to rent investors, housing associations, individual investors
and owner-occupiers. Our model, focused on homes to buy and rent in
non-prime locations in London, continues to deliver value even in
periods of economic and political uncertainty.
Trading performance
Although build to rent is a strategic focus for the Group we
continue to develop homes for individual open market sale and this
will remain an important part of the business. Our recent success
in securing build to rent sales means we have not launched any new
developments to individual customers in the period. However we do
have residual availability at a few predominantly forward sold
schemes where we have continued to make regular sales at prices in
line with expectations.
We have two new development launches scheduled for the first
quarter of 2018. The second phase of New Garden Quarter in
Stratford will be marketed initially in the UK prior to an
international launch and at Bow Garden Square, E3 we will be
opening an on-site sales centre expecting to sell to
owner-occupiers potentially utilising Help to Buy. The anticipated
average price at New Garden Quarter is around GBP550,000 and at Bow
Garden Square it is less than GBP500,000. At the latter 52 of the
83 homes for sale are expected to be priced below GBP500,000 such
that first time buyers would benefit from the reduction in stamp
duty announced in the Autumn budget.
Our core market remains homes at more affordable price points
but on some developments there are a few penthouse apartments at a
higher value. Despite some of the commentary around higher priced
homes in London we have secured the sale of all four penthouse
apartments at our Stratford Central development in the last few
weeks for a combined sum of over GBP5.0 million. This is
encouraging but higher value apartments will remain a very small
part of our business in the future and we expect the average price
in our development pipeline to remain under GBP600,000.
In build to rent we have once again experienced increased
interest and activity from both existing and new investors. This is
an indication of the amount of capital entering the sector from
institutions recognising the investment potential of residential
homes in London in addition to our growing reputation as a highly
skilled partner able to acquire land, achieve planning consents and
build a quality product.
In June 2017 we signed a pre-construction agreement with the
US-headquartered global rental housing operator, Greystar, to
develop just under 900 rental homes in Nine Elms, Battersea.
Together we are making progress towards securing a detailed
planning consent at which point Telford Homes will enter a full
design and build contract and the site will then become a
significant addition to our existing development pipeline. This is
an exciting opportunity to expand our build to rent portfolio and
to form a partnership with a major global investor in rental
housing with ambitious plans in London. Our existing build to rent
developments are also progressing well with The Pavilions, N1 due
for handover to L&Q by mid 2018. We have an excellent
relationship with M&G Real Estate on the two schemes we are
developing for them and we are actively looking at new
opportunities together.
We also have strong partnerships with providers of subsidised
affordable housing and always seek to enter contracts with them
swiftly to forward sell the subsidised homes on each of our
developments. The contracted delivery of subsidised housing is
financially attractive with an immediate de-risked sale and
payments received as the homes are built resulting in a strong
return on capital. Equally, true affordable housing is much needed
in London and we welcome the recent changes via the Mayor of
London's supplementary planning guidance to set some structure
around targets for individual sites. This includes seeking at least
35 per cent subsidised affordable housing which is consistent with
our existing policy when approaching new development
opportunities.
Market environment
There remains an urgent requirement for more homes to be built
in London. At the end of October 2017, the Mayor released new
forecasts indicating that London needs to build 66,000 new homes
every year, up from the previous 49,000, to meet its growing need
and compensate for years of underinvestment. This remains well
above the current rate of homebuilding with recent statistics from
the Department for Communities and Local Government showing an
increase in annual supply to just under 40,000 in the year to March
2017. Whilst this is encouraging, it stems from a boost in
construction around three years ago when the market was more
buoyant and much work still needs to be done to get anywhere near
the new annual target.
Notwithstanding the need for more homes, ongoing uncertainty
surrounding Brexit and a lack of political stability has deterred
some potential buyers from making a purchase particularly at higher
price levels. Changes to the tax system, especially the phased
removal of tax relief on mortgage interest, have also dampened
demand from UK based investors despite an active rental market in
our typical locations. This has played well into our desire to work
with institutional investors who are taking a longer term view and
provide greater certainty along with enhanced cash flows for
Telford Homes. Despite this we expect the structural shortage of
homes in London to continue to attract individual investors
including those based overseas who typically invest from a larger
asset base. There is a growing realisation from Londoners that
renting rather than buying is not as undesirable as some make it
out to be and the proportion of tenants versus owner-occupiers will
continue to increase in the coming years mirroring the situation in
many other cities globally.
We are working harder to sell individual homes with prospective
owner-occupiers needing more visits to a property before agreeing
to a purchase. However, this represents a more normal market
environment rather than one where the homes sell immediately.
Across our sales centres we have the experience and capacity to
secure sales as we have been in recent months. Where the price of
homes nearing completion is below GBP600,000 we have also seen
increased use of Help to Buy and, whilst this scheme is still a
small part of our sales, it is encouraging for wider market
sentiment that the scale of funding available has been increased to
meet expected demand until 2021.
Financial performance
The Group's financial results in any given period are influenced
by the number of open market completions achieved and there were
far fewer of these in the first half of the year than the number
expected in the second half. As experienced last year this is
purely down to development timings which are all on track and in
accordance with the original programmes but do not fall evenly
across the year. Completions of individual properties are
proceeding exactly as planned with no unexpected delays.
Revenue, including the Group's share of joint ventures, in the
first half of the year was GBP99.3 million, slightly lower than the
GBP104.3 million achieved in the same period last year. Whilst
there were more open market completions at 116 (H1 2017: 85) there
has been less revenue in the period from construction contracts,
particularly affordable housing, due again solely to the timing of
developments starting and finishing. In the future construction
contracts will be a greater proportion of revenue due to our
increased involvement in build to rent transactions where profit is
recognised as we build rather than at the end of a development.
Gross profit is stated after expensing loan interest that has
been capitalised within inventories of GBP1.3 million (H1 2017:
GBP0.5 million) and, before charging this interest, the gross
margin was 25.1 per cent for the six months to 30 September 2017,
up from 22.0 per cent in the equivalent period last year. This
increase is primarily due to some higher margin developments
completing in the period but is nevertheless pleasing given that
our move into build to rent is expected to reduce margins in return
for a higher return on capital. The margin on build to rent revenue
in the first half of the year was 17.5 per cent (H1 2017: 12.8 per
cent), exceeding our target of 12 to 13 per cent mainly due to cost
efficiencies, leaving a residual gross margin on open market sale
developments of 27.2 percent (H1 2017: 25.2 per cent) against a
target of 24 per cent.
Operating margin before finance costs for the six months to 30
September 2017 was 11.5 per cent up from 10.4 per cent in the same
period last year. The operating margin in the year to 31 March 2017
was 13.4 per cent with the timing of completions affecting first
half margins in both years where revenues are weighted to the
second half whilst overheads are more stable throughout the year.
We expect our operating margin for the year to 31 March 2018 to
improve on last year due partly to the mix of developments and
partly to operating leverage as we grow.
Net finance costs have increased slightly to GBP1.5 million from
GBP1.3 million last year. These are mainly comprised of
non-utilisation fees on our GBP180 million revolving credit
facility and arrangement fees on new joint venture debt facilities.
Actual bank interest paid is typically charged to developments
within cost of sales but the Group's interest rates remain
relatively low in a more benign banking environment and, as a
result, we are actively looking at extending our revolving credit
facility earlier than usual to provide longer term security. The
current facility runs until March 2019.
Profit before tax for the six months to 30 September 2017 was
GBP8.7 million, slightly lower than the equivalent period last year
(H1 2017: GBP9.0 million) which again is due to development timings
rather than the underlying performance of the business.
Our net debt at 30 September 2017 was GBP59.9 million (31 March
2017: GBP14.3 million) with gearing increasing to 29.0 per cent up
from 7.0 per cent at the year end. This increase in net debt is as
expected and is driven by construction on larger sites as we
deliver our growing pipeline. Our move into forward funded build to
rent transactions will contain our overall debt requirements and in
any case current borrowings of GBP95.2 million are covered several
times over by secured future income from forward sales. Total
forward sales, including the revenue recognised in the first half
of the year, exceed GBP580 million of revenue to be recognised in
the full year to 31 March 2018 and beyond.
Our development pipeline at 30 September 2017 represented GBP1.4
billion of future revenue and comprised just under 4,200 homes,
over 3,000 of which are in design or under construction with the
remainder going through the planning process. The average expected
price for open market homes in the pipeline is just under
GBP540,000, which is well within our target price range to continue
to attract a broad range of prospective buyers and tenants. We are
engaged in promising discussions on a number of attractive
opportunities to add to the pipeline, both for build to rent and
individual sale, in good locations at the right price level.
Dividend
The Board is pleased to declare an increase in the interim
dividend of 11.1 per cent to 8.0 pence (H1 2017: 7.2 pence)
demonstrating our confidence in achieving significant profit growth
in the full year to 31 March 2018. This dividend will be paid on 12
January 2018 to those shareholders on the register at the close of
business on 15 December 2017. The ex-dividend date is therefore 14
December 2017.
Operations
We are delighted to have secured the appointment of a new Group
Land & Planning Director in Jerome Geoghegan. Jerome joins
Telford Homes from L&Q Housing Group and is very well known and
respected in the London development market. His appointment is not
only an indication of the growing scale and reputation of Telford
Homes, but also signals a step change in our capabilities, capacity
and future growth plans. Jerome is expected to join the Board when
he arrives in January 2018 and a further announcement will be made
at that time.
We are proud to have been recognised with several awards in the
last few months, a testament to the standard of our design and
construction and also the quality of our finished homes. A recent
highlight was being named 'Medium Housebuilder of the Year' at the
prestigious Housebuilder Awards 2017. At the same event our Vibe
development won two awards ('Best Community Initiative' and 'Best
Design for Four Storeys or more') and was highly commended in a
third category. This recognition for the work we do is all part of
a growing reputation as the developer of choice for landowners,
housing associations, build to rent investors and the people who
end up living in our homes.
Outlook
We are firmly on track to deliver profit before tax in excess of
GBP40 million for the year to 31 March 2018, in line with market
expectations, having secured over 95 per cent of anticipated gross
profit. We have also already secured over 65 per cent of the gross
profit required to exceed GBP50 million of profit before tax in the
year to 31 March 2019.
The Board is very happy with the current position of the
business in terms of its risk profile, our capacity to do more and
the market opportunity to grow in the longer term. We believe our
strategy is right to accommodate periods of uncertainty but also to
step up and help to build the homes that London needs. Our move
into build to rent represents a significant part of that strategy.
There is no doubt that our current experience of the sector and the
ongoing demand from investors means it will be a key part of our
future. We will pursue new build to rent opportunities as a
priority given their reduced risk and the preferred returns on
capital they bring.
Although the economy in London is facing a prolonged period of
uncertainty this does not detract from the urgent need for more
homes in non-prime locations. It is this long term issue that gives
us the confidence to buy land, to build more homes and to keep
growing our pipeline. This is why we expect to be able to deliver
on our aspirations and to continue to grow Telford Homes in the
future.
Jon Di-Stefano
Chief Executive
28 November 2017
GROUP INCOME STATEMENT INCLUDING PROPORTIONAL SHARE OF JOINT
VENTURE RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Unaudited Unaudited Unaudited
Non-GAAP Non-GAAP Non-GAAP
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
--------------- --------------- ------------
Revenue 99,341 104,349 291,921
Cost of sales (75,660) (81,956) (228,720)
Gross profit 23,681 22,393 63,201
Administrative
expenses (11,272) (9,967) (20,805)
Selling expenses (2,246) (2,094) (5,091)
Operating profit 10,163 10,332 37,305
Finance income 310 78 160
Finance costs (1,775) (1,395) (3,337)
Profit before
income tax 8,698 9,015 34,128
Income tax expense (1,607) (1,607) (6,609)
Profit after
income tax 7,091 7,408 27,519
--------------- --------------- ------------
Key management information is presented to the Board with the
Group's share of joint venture results proportionally consolidated
and therefore including the relevant share of the results of joint
ventures in each line of the income statement and balance sheet.
The Group's joint ventures are an integral part of the business and
as such the Board believes that the financial results presented in
this way are the most appropriate for assessing the true underlying
performance of the business. The key metrics included within the
Chief Executive's Statement are therefore reported on this basis. A
reconciliation between key management information and Generally
Accepted Accounting Principles (GAAP) compliant information
accounting for joint ventures under IFRS 11 as equity accounted
investments is included in note 6.
GROUP BALANCE SHEET INCLUDING PROPORTIONAL SHARE OF JOINT
VENTURE RESULTS AT 30 SEPTEMBER 2017
Unaudited Unaudited Unaudited
Non-GAAP Non-GAAP Non-GAAP
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
--------------- -------------- ----------
Non current assets
Goodwill 818 818 818
Property, plant
and equipment 2,229 1,232 1,272
Trade and other
receivables 3,913 - 100
Deferred income
tax assets - 80 -
--------------- -------------- ----------
6,960 2,130 2,190
Current assets
Inventories 379,119 324,450 339,380
Trade and other
receivables 34,412 32,242 42,893
Cash and cash
equivalents 35,330 20,756 39,834
--------------- -------------- ----------
448,861 377,448 422,107
Total assets 455,821 379,578 424,297
Non current liabilities
Trade and other
payables (1,215) (1,439) (1,527)
Financial liabilities (649) (1,664) (1,096)
Deferred income
tax liabilities (181) - (194)
--------------- -------------- ----------
(2,045) (3,103) (2,817)
Current liabilities
Trade and other
payables (150,547) (132,496) (159,878)
Borrowings (95,215) (53,476) (54,085)
Current income
tax liabilities (1,830) (1,893) (3,232)
--------------- -------------- ----------
(247,592) (187,865) (217,195)
Total liabilities (249,637) (190,968) (220,012)
Net assets 206,184 188,610 204,285
--------------- -------------- ----------
Capital and reserves
Issued share
capital 7,534 7,499 7,529
Share premium 107,470 106,526 107,395
Retained earnings 91,180 74,585 89,361
Total equity 206,184 188,610 204,285
--------------- -------------- ----------
GROUP INCOME STATEMENT
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Note GBP000 GBP000 GBP000
----------------------- ----- ------------- ------------- ----------
Total revenue 99,341 104,349 291,921
Less share of revenue
from joint ventures (12,654) (5,263) (25,946)
Group revenue 86,687 99,086 265,975
----------------------- ----- ------------- ------------- ----------
Cost of sales (65,379) (77,965) (208,966)
Gross profit 21,308 21,121 57,009
Administrative
expenses (11,218) (9,944) (20,727)
Selling expenses (2,155) (2,021) (4,143)
Share of results
of joint ventures 1,577 1,164 4,634
Operating profit 9,512 10,320 36,773
Finance income 258 51 90
Finance costs (929) (1,095) (2,231)
Profit before income
tax 8,841 9,276 34,632
Income tax expense 3 (1,750) (1,868) (7,113)
Profit after income
tax 7,091 7,408 27,519
------------- ------------- ----------
Earnings per share:
Basic 5 9.4p 9.9p 36.8p
Diluted 5 9.4p 9.9p 36.6p
------------- ------------- ----------
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
------------- ------------- ---------
Movement in derivative
financial instruments
hedged 447 (809) (241)
Movement in deferred
tax on derivative
financial instruments
hedged (85) 145 37
Other comprehensive
income (expense)
net of tax (items
that may subsequently
be reclassified
into profit or
loss) 362 (664) (204)
Profit for the
period 7,091 7,408 27,519
Total comprehensive
income for the
period 7,453 6,744 27,315
------------- ------------- ---------
GROUP BALANCE SHEET
AT 30 SEPTEMBER 2017
Unaudited Unaudited Audited
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
-------------- -------------- ----------
Non current assets
Goodwill 289 289 289
Investments in
joint ventures 56,793 52,409 47,554
Property, plant
and equipment 2,229 1,232 1,272
Trade and other
receivables - - 100
Deferred income
tax assets - 226 -
-------------- -------------- ----------
59,311 54,156 49,215
Current assets
Inventories 319,411 269,547 287,652
Trade and other
receivables 35,048 31,815 38,288
Cash and cash
equivalents 31,925 15,586 38,629
-------------- -------------- ----------
386,384 316,948 364,569
Total assets 445,695 371,104 413,784
Non current liabilities
Trade and other
payables (1,215) (1,439) (1,527)
Financial liabilities (649) (1,664) (1,096)
Deferred income
tax liabilities (454) - (323)
(2,318) (3,103) (2,946)
Current liabilities
Trade and other
payables (141,246) (124,022) (149,516)
Borrowings (94,117) (53,476) (53,805)
Current income
tax liabilities (1,830) (1,893) (3,232)
-------------- -------------- ----------
(237,193) (179,391) (206,553)
Total liabilities (239,511) (182,494) (209,499)
Net assets 206,184 188,610 204,285
-------------- -------------- ----------
Capital and reserves
Issued share
capital 7,534 7,499 7,529
Share premium 107,470 106,526 107,395
Retained earnings 91,180 74,585 89,361
Total equity 206,184 188,610 204,285
-------------- -------------- ----------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2017 (UNAUDITED)
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- --------
Balance at 1 April
2017 7,529 107,395 89,361 204,285
Profit for the period - - 7,091 7,091
Total other comprehensive
income - - 362 362
Excess tax on share
options - - 43 43
Dividend on equity
shares - - (6,378) (6,378)
Proceeds of equity
share issues 5 75 - 80
Share-based payments - - 191 191
Sale of own shares - - 510 510
Balance at 30 September
2017 7,534 107,470 91,180 206,184
--------- --------- ---------- --------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2016 (UNAUDITED)
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- --------
Balance at 1 April
2016 7,485 106,423 73,062 186,970
Profit for the period - - 7,408 7,408
Total other comprehensive
expense - - (664) (664)
Excess tax on share
options - - (66) (66)
Dividend on equity
shares - - (5,746) (5,746)
Proceeds of equity
share issues 14 103 - 117
Share-based payments - - 124 124
Purchase of own shares - - (1) (1)
Sale of own shares - - 468 468
Balance at 30 September
2016 7,499 106,526 74,585 188,610
--------- --------- ---------- --------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2017 (AUDITED)
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- ---------
Balance at 1 April
2016 7,485 106,423 73,062 186,970
Profit for the year - - 27,519 27,519
Total other comprehensive
expense - - (204) (204)
Excess tax on share
options - - (5) (5)
Dividend on equity
shares - - (11,135) (11,135)
Proceeds of equity
share issues 44 972 - 1,016
Share-based payments - - 255 255
Purchase of own shares - - (860) (860)
Sale of own shares - - 729 729
Balance at 31 March
2017 7,529 107,395 89,361 204,285
--------- --------- ---------- ---------
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
------------- ------------- ---------
Cash flow from operating
activities
Operating profit 9,512 10,320 36,773
Depreciation 350 290 599
Share-based payments 191 124 255
Profit on sale of
tangible fixed assets - (17) (20)
Increase in inventories (29,864) (29,397) (46,525)
Decrease (increase)
in receivables 3,585 (153) (6,726)
(Decrease) increase
in payables (9,758) 19,248 44,953
Share of results
from joint ventures (1,577) (1,164) (4,634)
------------- ------------- ---------
(27,561) (749) 24,675
Interest paid and
debt issue costs (1,336) (1,991) (3,898)
Income tax paid (3,063) (3,108) (6,511)
Cash flow from operating
activities (31,960) (5,848) 14,266
Cash flow from investing
activities
Distribution from
joint venture 8,557 - 12,045
Investment in joint
ventures (16,219) (5,588) (9,308)
Purchase of tangible
assets (1,307) (37) (387)
Proceeds from sale
of tangible assets - 17 20
Consideration paid
for business combination - (3,556) (3,556)
Interest received 13 51 90
------------- ------------- ---------
Cash flow from investing
activities (8,956) (9,113) (1,096)
Cash flow from financing
activities
Proceeds from issuance
of ordinary share
capital 80 117 1,016
Purchase of own shares - (1) (860)
Sale of own shares 510 468 729
Increase in bank
loans 40,000 15,000 15,000
Dividend paid (6,378) (5,746) (11,135)
Cash flow from financing
activities 34,212 9,838 4,750
Net (decrease) increase
in cash and cash
equivalents (6,704) (5,123) 17,920
Cash and cash equivalents
brought forward 38,629 20,709 20,709
------------- ------------- ---------
Cash and cash equivalents
carried forward 31,925 15,586 38,629
------------- ------------- ---------
NOTES
1 Basis of preparation
The interim financial statements have been
prepared on the basis of the recognition and
measurement requirements of International
Financial Reporting Standards (IFRS) in issue
that are either endorsed by the EU and effective
at 31 March 2018 or are expected to be endorsed
and effective at 31 March 2018.
The interim financial statements do not constitute
statutory financial statements within the
meaning of Section 434 of the Companies Act
2006. They are prepared in accordance with
IAS 34 interim financial reporting. The figures
for the half years ended 30 September 2017
and 30 September 2016 are unaudited. Consistent
with previous years, the Board has included
within the interim results an income statement
and a balance sheet using proportional consolidation
for the results of joint ventures along with
the Generally Accepted Accounting Principles
(GAAP) compliant versions of the income statement
and balance sheet which present joint ventures
as equity accounted investments.
The interim financial statements were approved
by the directors on 28 November 2017 and the
GAAP compliant information has been reviewed
by the auditors whose review report is unqualified
and will be included in the interim report
distributed to shareholders.
The directors have assessed the Group's projected
business activities and available financial
resources together with detailed forecasts
for cash flow and relevant sensitivity analysis.
The directors believe that the Group remains
well placed to manage its business risks successfully.
After making appropriate enquiries the directors
have a reasonable expectation that the Group
has adequate resources to continue in operational
existence for the foreseeable future. Accordingly
the directors continue to adopt the going
concern basis in preparing the interim financial
statements.
The Group's statutory financial statements
for the year ended 31 March 2017 were approved
by the Board of directors on 30 May 2017,
have been reported on by the Group's auditors
and delivered to the Registrar of Companies.
The report of the auditors was unqualified
and did not contain statements under Section
498 of the Companies Act 2006.
The preparation of financial statements in
conformity with IFRS requires management to
make judgements, estimates and assumptions
that affect the application of policies and
reported amounts of assets, liabilities, income
and expenses. The estimates and associated
assumptions are based on historical experience
and various other factors that are believed
to be reasonable under the circumstances,
the results of which form the basis of making
judgements about the carrying value of assets
and liabilities that are not readily apparent
from other sources. Actual results may differ
from these estimates.
The Group's financial and operational performance
is subject to a number of risks. These risks
are continually assessed by the Board to mitigate
and minimise their impact on the business.
There are also a number of risks which are
outside of the Group's control. The principal
risks facing the business, the potential impact
of these risks and how the Group mitigates
against them is disclosed in the Group's financial
statements as at 31 March 2017.
The significant judgements made by management
in applying the Group's accounting policies
and the key sources of uncertainty were principally
the same as those applied to the Group's financial
statements as at 31 March 2017.
2 Accounting policies
Accounting convention
The interim accounts have been prepared under
the historical cost convention as modified
for reassessment of derivatives at fair value
and on a basis consistent with the accounting
policies in the financial statements for the
year ended 31 March 2017.
3 Taxation
Taxation has been calculated on the profit
for the six months ended 30 September 2017
at the estimated effective tax rate of 19.0%
(30 September 2016: 20.0%).
4 Dividends
The interim dividend declared for the six
months ended 30 September 2017 is 8.0 pence
per ordinary share and is expected to be
paid on 12 January 2018 to those shareholders
on the register at the close of business
on 15 December 2017. The ex-dividend date
is therefore 14 December 2017. This dividend
was declared after 30 September 2017.
The interim dividend paid for the six months
ended 30 September 2016 was 7.2 pence per
ordinary share and the final dividend paid
for the year ended 31 March 2017 was 8.5
pence per ordinary share.
5 Earnings per share
Basic earnings per share is calculated
by dividing the earnings attributable to
ordinary shareholders by the weighted average
number of ordinary shares outstanding during
the year, excluding those held in the Share
Incentive Plan, which are treated as cancelled.
For diluted earnings per share, the weighted
average number of ordinary shares in issue
is adjusted to assume conversion of all
dilutive potential ordinary shares.
Earnings per share have been calculated
using the following figures: Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
-------------- -------------- --------------
Weighted average number of shares
in issue 75,061,480 74,673,703 74,716,939
Dilution - effect of share schemes 569,521 407,622 395,643
-------------- -------------- --------------
Diluted weighted average number of
shares in issue 75,631,001 75,081,325 75,112,582
Profit after taxation GBP7,091,000 GBP7,408,000 GBP27,519,000
Earnings per share:
Basic 9.4p 9.9p 36.8p
Diluted 9.4p 9.9p 36.6p
6 Segmental reporting
The Group has only one reportable segment being housebuilding in
the United Kingdom. Financial analysis is presented on this basis
to the chief decision makers for the Group these being the
directors.
Management information is presented to the directors with the
Group's share of joint venture results proportionally consolidated
to reflect the true underlying performance of the Group. The Group
adopted IFRS 11 'Joint Arrangements' in the year to 31 March 2015
and as such joint ventures within these condensed financial
statements are accounted for as equity accounted investments rather
than by proportional consolidation. A reconciliation between
management information including a proportional share of joint
venture results and the GAAP compliant information in the condensed
financial statements is as follows:
Remove
Management share of
6 months ended 30 information joint ventures GAAP
September 2017 GBP000 GBP000 GBP000
-------------- ----------------- ----------
Revenue 99,341 (12,654) 86,687
Gross profit 23,681 (2,373) 21,308
Profit before income
tax 8,698 143 8,841
Total assets 455,821 (10,126) 445,695
Total liabilities (249,637) 10,126 (239,511)
Net assets 206,184 - 206,184
-------------- ----------------- ----------
Remove
share
Management of joint
6 months ended 30 Information ventures GAAP
September 2016 GBP000 GBP000 GBP000
------------- ---------- ----------
Revenue 104,349 (5,263) 99,086
Gross profit 22,393 (1,272) 21,121
Profit before income
tax 9,015 261 9,276
Total assets 379,578 (8,474) 371,104
Total liabilities (190,968) 8,474 (182,494)
Net assets 188,610 - 188,610
------------- ---------- ----------
Remove
Management share of
For the year ended Information joint ventures GAAP
31 March 2017 GBP000 GBP000 GBP000
------------- ---------------- ----------
Revenue 291,921 (25,946) 265,975
Gross profit 63,201 (6,192) 57,009
Profit before income
tax 34,128 504 34,632
Total assets 424,297 (10,513) 413,784
Total liabilities (220,012) 10,513 (209,499)
Net assets 204,285 - 204,285
------------- ---------------- ----------
7 Net debt
The components of net debt are outlined below.
Non-GAAP Non-GAAP Non-GAAP
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
------------- ------------- ---------
Borrowings (95,215) (53,476) (54,085)
Cash and cash
equivalents 35,330 20,756 39,834
------------- ------------- ---------
Net debt (59,885) (32,720) (14,251)
------------- ------------- ---------
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKFDQOBDDQDB
(END) Dow Jones Newswires
November 29, 2017 02:00 ET (07:00 GMT)
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