TIDMBLEY
RNS Number : 4052S
Bailey(C.H.) PLC
21 December 2016
C H Bailey plc
21 December 2016
Chairman's statement and unaudited financial results
for the six months ended 30(th) September 2016
CH Bailey plc ("CH Bailey", the "Company" or, together with its
subsidiaries, the "Group"), announces its interim results for the
half year ended 30 September 2016.
Key Highlights
-- Turnover up 22% to GBP2.9m (2015: GBP2.4m).
-- Operating profit of GBP577k (2015 loss: GBP494k), assisted by
foreign exchange gains and performance of current asset
investments.
-- EBITDA at GBP1.1m (2015: loss of GBP70k).
-- Overall profit for the period of GBP361k (2015: loss GBP717k).
-- Retail and offices in Tanzania at 85% occupancy and serviced
accommodation increasing in line with two year plan.
-- Development of St Lucia Street property in Malta nearing
completion and refurbishment of Galenia Estate hospitality unit
completed.
Interim Statement and Results
Our interim results for the 6 month period ended 30 September
2016 show a profit for the period of GBP381,000 (2015: loss
GBP717,000). Revenue has increased by 22% to GBP2.9m (2015:
GBP2.4m) with cost of sales increasing by 16% to GBP2.0m
(2015:GBP1.8m). This has resulted in an operating profit for the
period of GBP577,000 (2015: loss GBP494,000). EBITDA has risen from
a small loss of GBP52,000 to earnings for the period of
GBP1.1m.
These improved results arise from a combination of increased
sales from the serviced offices and accommodation in Tanzania,
profits on our current asset investments and the positive effect of
the slide in the value of the pound.
The Phase III of our offices in Tanzania is now fully let and we
have seen a build up throughout the period in the occupancy of our
new serviced accommodation in Dar es Salaam. Despite a turbulent
time for engineering in South Wales, Bailey Industrial Engineering
Limited ("BIE") has traded in line with our internal forecasts.
During the period we have been working on the development at St
Lucia Street in Valletta, Malta, which is nearing completion, and
have refurbished the hospitality unit at Montagu in South
Africa.
Overhead costs have generally been kept in line with the prior
period, although the pre-revenue planning work in Malta coupled
with additional overheads incurred in South Africa in connection
with the renovation of the hospitality unit ready for occupancy
have resulted in administrative expenses increasing from GBP761,000
in the same period last year to GBP944,000 this time.
Tanzania
Despite significant economic uncertainty in Tanzania, the Phase
III offices are now fully let, with our overall office and retail
occupancy in Dar es Salaam now at over 85%.
Our new serviced accommodation, the Oyster Bay Suites, has been
building occupancy levels during the period. These have continued
to climb in the two months since the period end and in line with
our internal forecast that it would take two years for the product
to become established in the market.
By contrast, although the quality of our accommodation continues
to be recognised with various awards, the hospitality business in
Tanzania (The Oyster Bay and Beho Beho) has remained subdued,
primarily due to the imposition of VAT on tourist revenue, which
has made it difficult to compete with similar offerings in other
countries, such as Kenya. However, these leisure assets represent
less than 20% of our revenue in Tanzania.
South Africa
We are pleased with progress at our hospitality unit outside
Montagu, now re-named the Galenia Estate. Following its
refurbishment over the low season, it has been able to maintain
similar occupancy levels to those seen previously, but at a much
enhanced room rate.
We continue to discuss our approach to the Galenia Estate and
Little Bean Farm sites with local planning authorities and we
believe that both have significant long term development
potential.
The appointment of Marinus Venter, with his African property
sector background, as Head of Development and Operations, has added
impetus to our search for additional development opportunities in
the Western Cape of South Africa and we have identified several
interesting development properties.
Malta
Valletta continues to exhibit increasing demand for
well-appointed office and residential property. The refurbishment
of the St Lucia Street property is nearing completion and we are
starting to market it, as single or multiple tenant office space.
We are also considering various options to generate income from the
property on St Barbara Bastions.
We have received MEPA planning consent for the Charles Street
property and are hoping to receive consent for the Archbishop
Street property in the New Year. We expect to start development
work on one of these as soon as St Lucia Street is generating
income.
UK Operations
Bailey Industrial Engineering in Newport has faced many
challenges associated with the sector in that part of the world.
However, recent months have seen an improvement in orders as the
TATA plant at Port Talbot came back after a period of inactivity,
due to the threat of closure, and other client orders also picked
up. The result is revenue only 7% down from the previous period and
with improved margins and controlled overhead costs, the business
produced a 134% increase in operating profit, from GBP17,000 in the
prior period to GBP40,000.
The future remains uncertain, but TATA and the potential of work
arising from the go ahead for Hinkley Point give cause for a more
positive view. Our lease at Newport expires in 2017 and, as a
result, we are currently considering our options.
Outlook
Market conditions have been difficult in several of our sectors,
with the effect of the oil and gas prices and general economic
uncertainty. During the first six months of this financial year,
this was offset by newer revenue streams coming on line and by the
fact that almost all of our non-UK revenue is denominated in US
dollars, with many costs and much of our borrowing in local
currencies. This has resulted in a significant foreign currency
benefit. We are cautious about prospects, as there are few signs
that economic uncertainty will reduce in the short term and
currencies may not remain in our favour.
We therefore continue to keep costs under review, whilst looking
for ways to increase the value of our existing property assets. We
are also seeking interesting property trading and development
opportunities in more buoyant markets, where we have market
knowledge and connections, such as the Western Cape.
The key focus of your Group is on leisure and commercial
operations and properties in Tanzania, South Africa and Malta. I am
confident that the Group is well placed in these countries to add
value for shareholders.
David Wilkinson
21 December 2016
Further information:
Bryan Warren, Company Secretary
C H Bailey Plc
Tel: 01633 262961
James Felix / Ciaran Walsh
Arden Partners plc
Tel: 020 7614 5900
Consolidated Income Statement
for the six months ended 30 September 2016
Notes September September March
2016 2015 2016
GBP GBP GBP
Continuing operations
Revenue 4 2,923,756 2,395,441 5,105,211
Cost of sales (2,042,291) (1,767,144) (3,576,420)
------------------- ------------------ -----------------
Gross profit 881,465 628,297 1,528,791
Administrative expenses (944,185) (761,232) (1,711,538)
Investment activities
and other income 5 639,630 (360,588) 216,207
------------------- ------------------ -----------------
Operating profit (loss) 576,910 (493,523) 33,460
EBITDA* 1,100,589 (51,924) 946,526
Depreciation (523,071) (440,767) (918,920)
(Loss) profit on sale of plant
and equipment (608) (832) 5,854
------------------- ------------------ -----------------
Operating profit (loss) 576,910 (493,523) 33,460
------------------------------- ------ ------------------- ------------------ -----------------
Finance income 6 901 14,103 25,846
Finance costs 7 (215,185) (239,012) (457,849)
------------------- ------------------ -----------------
Profit (loss) before taxation 362,626 (718,432) (398,543)
Taxation (1,869) 945 (28,115)
Minority interest 59 305 344
------------------- ------------------ -----------------
Profit (loss) for the
financial period 360,816 (717,182) (426,314)
------------------- ------------------ -----------------
Earnings (loss) per share
from continuing and total
operations 8 4.73p (9.43p) (5.60p)
*Earnings before interest, taxation, depreciation, loss on sale
of plant and equipment and profit on sale of property.
Consolidated Statement of
Comprehensive Total Income
for the six months ended 30 September 2016
September September March
2016 2015 2016
GBP GBP GBP
Profit (loss) for the financial
period 360,816 (717,182) (426,314)
Items that may be reclassified
to profit and loss:
Exchange differences 822,397 (1,654,433) (1,543,976)
Total comprehensive income for
the period 1,183,213 (2,371,615) (1,970,290)
-------------- -------------- --------------
Consolidated Balance Sheet
as at 30 September 2016
Notes September September March
2016 2015 2016
GBP GBP GBP
Non-current assets
Property, plant and equipment 9 14,461,315 12,455,865 12,827,555
Operating leases 92,979 35,175 87,626
Trade and other receivables 855,895 620,217 694,617
Deferred tax asset 268,460 187,272 231,757
15,678,649 13,298,529 13,841,555
---------------- ---------------- ----------------
Current assets
Inventory 19,976 15,622 19,851
Trade and other receivables 2,708,367 1,997,833 2,334,371
Current asset investments 10 1,755,653 1,889,234 1,522,622
Cash and cash equivalents 13 1,771,745 4,418,838 2,183,225
6,255,741 8,321,527 6,060,069
Assets classified as held
for sale 197,811 171,850 178,112
6,453,552 8,493,377 6,238,181
---------------- ---------------- ----------------
Current liabilities
Trade and other payables (3,033,874) (2,292,295) (2,287,285)
Bank loans and overdrafts 13 (2,067,491) (1,663,368) (2,049,180)
Other loans 13 - (793,787) -
Obligations under finance
leases - (17,181) (1,934)
Provisions (225,000) (225,000) (225,000)
(5,326,365) (4,991,631) (4,563,399)
---------------- ---------------- ----------------
Net current assets 1,127,187 3,501,746 1,674,782
---------------- ---------------- ----------------
Total assets less current
liabilities 16,805,836 16,800,275 15,516,337
Non-current liabilities
Bank loans 13 (3,503,549) (3,652,976) (3,413,624)
Obligations under finance - - -
leases
Deferred tax liabilities (46,013) - (42,190)
Net assets 13,256,274 13,147,299 12,060,523
---------------- ---------------- ----------------
Equity
Called-up share capital 11 833,541 833,541 833,541
Share premium account 609,690 609,690 609,690
Capital redemption reserve 5,163,332 5,163,332 5,163,332
Investment in own shares (915,616) (960,509) (929,955)
Translation reserve 59,535 50,978 54,470
Retained earnings 7,504,591 7,449,574 6,328,290
---------------- ---------------- ----------------
Surplus attributable to
the parent's shareholders 13,255,073 13,146,606 12,059,368
Minority interest 1,201 1,093 1,155
Total equity 13,256,274 13,147,699 12,060,523
---------------- ---------------- ----------------
Consolidated Cash Flow Statement
for the six months ended 30 September 2016
Notes September September March
2016 2015 2016
GBP GBP GBP
Cash flows from operating
activities
Cash generated from operations 12 625,669 30,868 (281,549)
Interest paid (215,185) (239,012) (457,849)
Overseas tax paid (30,380) (17,452) (48,807)
Net cash flow from operating
activities 380,104 (225,596) (788,205)
---------------- --------------- ---------------
Investing activities
Sale of property, plant and
equipment 6,586 11,330 32,304
Purchase of property, plant
and equipment (779,658) (2,194,701) (2,263,358)
Sale of investments 22,186 117,431 809,533
Purchase of investments (21,372) (574,800) (949,787)
Interest received 901 14,103 25,846
Net cash flow from investing
activities (771,357) (2,626,637) (2,345,462)
---------------- --------------- ---------------
Financing activities
Equity dividends paid - - (1,521,551)
Dividend to minority interest - - -
Investment in own shares 12,492 - 32,988
Movement in bank loans (268,823) (625,876) (1,083,462)
Movement in directors' loans 222,155 (15,533) (18,636)
Movement in other loans - 793,787 -
Movement in capital element of
finance leases (1,934) (14,947) (30,194)
Net cash flow from financing
activities (36,110) 137,431 (2,620,855)
---------------- --------------- ---------------
Net (decrease) in cash and
cash equivalents (427,363) (2,714,802) (5,754,522)
Cash and cash equivalents at beginning
of period 134,045 5,321,954 5,321,954
Exchange differences (2,428) 148,318 566,613
Cash and cash equivalents
at end of period 13 (295,746) 2,755,470 134,045
---------------- --------------- ---------------
Reconciliation of net cash flow to movement in net (debt)
in the period
Net (decrease) in cash and
cash equivalents (427,363) (2,714,802) (5,754,522)
Net cashflow from the movement
in debt 270,757 (152,964) 1,113,656
---------------- --------------- ---------------
Movement in net (debt) during
the period (156,606) (2,867,766) (4,640,866)
Net (debt) funds at the beginning
of period (3,281,513) 933,933 933,933
Exchange differences (361,176) 225,359 425,420
Net (debt) at the end of
period 13 (3,799,295) (1,708,474) (3,281,513)
---------------- --------------- ---------------
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2016
Called-up Share Capital Investment Translation Retained Minority Total
share premium redemption in own reserve earnings interest
capital account reserve shares
GBP GBP GBP GBP GBP GBP GBP GBP
At 31 March
2015 833,541 609,690 5,163,332 (960,509) 51,307 9,820,860 1,370 15,519,591
Transactions with owners
recorded directly in equity
Equity
dividends
paid - - - - - (1,521,551) - (1,521,551)
Sale on
investment
in own
shares - - - - - 32,988 - 32,988
Cost of
investment
in own
shares - - - 30,554 - (30,554) - -
Income
statement
(Loss) for
the
financial
period - - - - - (426,314) (344) (426,658)
Items that may be reclassified
to profit and loss
Exchange
differences - - - - 3,163 (1,547,139) 129 (1,543,847)
------------------- ------------------ ---------------------- ---------------------- ------------------------ ------------------- ----------------- -----------------------
At 31 March
2016 833,541 609,690 5,163,332 (929,955) 54,470 6,328,290 1,155 12,060,523
Transactions with owners
recorded directly in equity
Sale on
investment
in own
shares - - - - - 12,492 - 12,492
Cost of
investment
in own
shares - - - 14,439 - (14,439) - -
Income
statement
Profit for
the
financial
period - - - - - 360,816 (59) 360,757
Items that may be reclassified
to profit and loss
Exchange
differences - - - - 5,065 817,332 105 822,502
------------------- ------------------ ---------------------- ---------------------- ------------------------ ------------------- ----------------- -----------------------
At 30
September
2016 833,541 609,690 5,163,332 (915,516) 59,535 7,504,491 1,201 13,256,274
------------------- ------------------ ---------------------- ---------------------- ------------------------ ------------------- ----------------- -----------------------
.
Notes to the Accounts
1. General information
Legal status and country of incorporation
C. H. Bailey plc, company number 190106, is incorporated in
England and Wales under the Companies Act 2006.
Basis of preparation
These interim financial statements have been prepared in
accordance with International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS) as adopted by
the European Union and with the Companies Act 2006. Therefore these
financial statements comply with the AIM rules.
The interim financial statements are prepared using the
historical cost basis of accounting except for:
-- Properties held at the date of transition to IFRS which are stated at deemed cost; and
-- Assets held for sales which are stated at the lower of fair
value less anticipated disposal costs and carrying value.
Going concern
The directors have prepared these financial statements on the
fundamental assumption that the group is a going concern and will
continue to trade for at least 12 months following the date of
approval of the financial statements.
Accounting period
The current period is for the six months ended 30 September 2016
and the comparative period is for the six months ended 30 September
2015.
Functional and presentational currency
The financial statements are presented in pounds sterling
because that is the functional currency of the primary economic
environment in which the group operates.
2. Significant accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the company and entities controlled by the company
(its subsidiaries) made up to 31 March 2016. Control is achieved
where the company has the power to govern the financial and
operating policies of an investee so as to obtain benefits from its
activities.
Minority interests in the net assets of consolidated
subsidiaries are identified separately from the group's equity
therein. Minority interests consist of the amount of those
interests at the date of the original business combination (see
below) and the minority's share of changes in equity since the date
of the combination. Losses applicable to the minority in excess of
the minority's interest in the subsidiary's equity are allocated
against the interests of the group except to the extent that the
minority has a binding obligation and is able to make an additional
investment to cover the losses.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Business combinations and goodwill
The acquisition of subsidiaries is accounted for using the
acquisition method. The assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at their acquisition date except
for non-current assets (or disposal groups) that are classified as
held for sale in accordance with IFRS 5 which are recognised and
measured at fair value less costs to sell. Any excess of the cost
over the asset valuation as calculated above is recognised as
goodwill.
In accordance with the options that are available under IFRS 1
on transition to IFRS, the group elected not to apply IFRS 3
retrospectively to past business combinations that occurred before
the date of transition to IFRS.
Accordingly goodwill that had previously been offset against
reserves under UK GAAP has not been recognised in the opening IFRS
balance sheet. The interest of any minority shareholders in the
acquiree is initially measured at the minority's proportion of the
net fair value of the assets, liabilities and contingent
liabilities recognised.
Investments in associates and trade investments
The results of entities over which the group is not in a
position to be able to exercise significant influence despite
holding a significant shareholding are not accounted for as
associates and therefore are not equity accounted. The companies
are classified as trade investments and are carried as available
for sale financial assets which are measured at cost, as the
directors consider that fair value cannot be reliably measured,
other than impairment losses which are recognised in the income
statement. Dividend income is recognised in the income statement on
a cash basis when received.
Property, plant and equipment
Property is carried at deemed cost at the date of transition to
IFRS based on the previous UK GAAP valuations. Plant and equipment
held at the date of transition and subsequent additions to
property, plant and equipment are stated at purchase cost including
directly attributable costs. The group does not have a revaluation
policy. Freehold land is not depreciated. Depreciation of other
property, plant and equipment is provided on a straight line basis
using rates calculated to write down the cost of each asset over
its estimated useful life as follows:
Property:
Freehold buildings Between 2% and 5%
Leasehold buildings Period of the lease
Plant and equipment Between 10% and 25%
Annual reviews are made of estimated useful lives and material
residual values.
Investment and development property
Properties are externally valued on the basis of fair value at
the balance sheet date. Investment property is recorded at
valuation whereas trading property is stated at the lower of cost
and net realisable value. Any surplus or deficit arising is
recognised in investment activities in the income statement.
The cost of properties in the course of development includes
attributable interest and other associated outgoings. Interest is
calculated on the development expenditure by reference to specific
borrowings. Interest is not capitalised where no development
activity is taking place. A property ceases to be a development
property on practical completion.
Investment property disposals are recognised on completion.
Profits and losses are recognised in investment activities in the
income statement. The profit on disposal is determined as the
difference between the net sale proceeds and the carrying amount of
the asset at the commencement of the accounting period plus capital
expenditure in the period.
Where investment properties are appropriated to trading stock,
they are transferred at market value. If properties held for
trading are appropriated to investment, they are transferred at
book value.
Lessee accounting
Initial rental payments in respect of operating leases are
included in current and non-current assets as appropriate and
amortised to the income statement over the period of the lease.
Ongoing rental payments are charged as an expense in the income
statement on a straight line basis until the date of the next rent
review. Finance leases are capitalised and depreciated in
accordance with the accounting policy for property, plant and
equipment. As permitted by IFRS 1 at the date of transition to
IFRS, the carrying value of long leasehold properties are based on
the previous UK GAAP valuations and this has been taken as deemed
cost. Rental costs arising from operating leases are charged as an
expense in the income statement on a straight line basis over the
period of the lease.
Non-current assets held for sale
Non-current assets are reclassified as assets held for sale if
they are immediately available for sale in their current condition
and their carrying value will be recovered through a sale
transaction on which is highly probable to be completed within 12
months of the initial classification. Assets held for sale are
valued at the lower of carrying value at the date of initial
classification and fair value less costs to sell.
Impairment of non-financial assets
Goodwill is tested annually for impairment or more frequently if
there are any changes in circumstances or events that indicate that
a potential impairment may exist. Goodwill impairments cannot be
reversed. Property, plant and equipment are reviewed for
indications of impairment when events or changes in circumstances
indicate that the carrying amount may not be recovered. If there
are indications then a test is performed on the asset affected to
assess its recoverable amount against carrying value. An asset
impaired is written down to the higher of value in use or its fair
value less cost to sell.
Deferred and current taxation
The charge for taxation is based on the taxable profit or loss
for the year and takes into account taxation deferred because of
differences between the treatment of certain items for taxation and
for accounting purposes. Full provision is made for the tax effects
of these differences. Deferred tax is provided on unremitted
earnings from overseas subsidiaries where it is probable that these
earnings will be remitted to the UK in the foreseeable future.
Deferred tax is measured using tax rates that have been enacted, or
substantively enacted, by the year end balance sheet date. The
measurement of deferred tax reflects the tax consequences that
would follow the manner in which the group expects, at the end of
the reporting period, to recover or settle the carrying value of
its assets and liabilities. Deferred tax assets and liabilities are
not discounted.
The carrying amount of the deferred tax assets is reviewed at
each reporting balance sheet date to ensure that it is probable
that sufficient taxable profits will be available to allow the
asset to be recovered. Assets and liabilities, in respect of both
deferred and current tax, are only offset when there is a legally
enforceable right to offset and the assets and liabilities relate
to taxes levied by the same taxation authority.
Deferred and current tax is charged or credited in the income
statement except when it relates to items charged directly to
equity in which case the associated tax is also dealt with in
equity.
Stocks
Stocks are valued at the lower cost of purchase and net
realisable value. Cost comprises actual purchase price and, where
applicable, associated direct costs incurred bringing the stock to
its present location and condition. Net realisable value is based
on estimated selling price less further costs expected to be
incurred to completion and disposal. Provision is made for
obsolete, slow moving or defective items where appropriate.
Financial instruments
Financial assets and financial liabilities are recognised on the
consolidated balance sheet when the group becomes a party to the
contractual provisions of the instrument.
Financial assets are recognised and derecognised on a trade date
where the purchase or sale of an asset is under a contract whose
terms require delivery of the investment within the timeframe
established by the market concerned. Financial assets are
classified as "loans and receivables", "held to maturity"
investments, "available for sale" investments or "assets at fair
value through the profit and loss" depending upon the nature and
purpose of the financial asset. The classification is determined at
the time of the initial recognition.
Financial assets are normally classified as "loans and
receivables" and are initially measured at fair value including
transaction costs incurred. The only financial assets currently
held at "fair value through profit or loss" are the current asset
investments.
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the group after deducting all of
its liabilities. There are currently no financial liabilities held
at "fair value through profit or loss".
Loans and receivables
Trade receivables, loans and other receivables are measured on
initial recognition at fair value and, except for short term
receivables where the recognition of interest would be immaterial,
are subsequently re-measured at amortised cost using the effective
interest rate method. Allowances for irrecoverable amounts, which
are dealt with in the income statement, are calculated based on the
difference between the asset's carrying amount and the present
value of estimated future cash flows, calculated based on past
default experience, discounted at the effective interest rate
computed at initial recognition where material.
Derivative financial instruments and hedge accounting
The group has loans held in US dollars which are disclosed in
borrowings and are at fixed rates of 6.25% and 8%. The other group
loans and overdrafts are subject to floating interest rates based
on LIBOR plus the most competitive margin available. The group's
policy is not to hedge its international assets with respect to
foreign currency balance sheet translation exposure, nor against
foreign currency transactions. The group generally does not enter
into any forward exchange contracts and it does not use financial
instruments for speculative purposes. The group does not hold any
derivative financial instruments or embedded derivative financial
instruments at either period end.
Cash and cash equivalents
Cash and cash equivalents includes cash-in-hand, cash at bank
and short term highly liquid investments that are readily
convertible into known amounts of cash within three months from the
date of initial acquisition with an insignificant risk of a change
in value.
Impairment of financial assets
Financial assets, other than those designated as "assets at fair
value through the profit and loss" are assessed for indicators of
impairment at each balance sheet date. Financial assets are
impaired where there is objective evidence that, as a result of one
or more events that occurred after the initial recognition of the
financial assets, the estimated future cash flows of the investment
have been impacted.
Other financial liabilities
Other financial liabilities, including trade payables, are
measured on initial recognition at fair value and, except for short
term payables where the recognition of interest would be
immaterial, are subsequently re-measured at amortised cost using
the effective interest rate method.
Bank loans
Interest bearing bank loans are recorded at the proceeds
received less capital repayments made. Finance charges are
accounted for on an accruals basis in the profit and loss account
using the effective interest rate method. They are included within
accruals to the extent that they are not settled in the period in
which they arise.
Provisions
Provisions are created where the group has a present obligation
(legal or constructive) as a result of a past event where it is
probable that the group will be required to settle that obligation.
Provisions are measured at the directors' best estimate of the
expenditure required to settle the obligation at the balance sheet
date. Provisions are only discounted to present value where the
effect is material.
Net funds
Net funds is defined as cash and cash equivalents, bank and
other loans including finance lease obligations and derivative
financial instruments stated at current fair value.
Revenue recognition
Revenue
Revenue represents the fair value of the consideration received
and receivable for services provided and goods supplied to third
party customers. In respect of long term contracts and contracts
for on-going services, revenue is recognised as the contract
progresses on the basis of work completed. Revenue excludes value
added tax.
Investment and interest income
Dividend income is recognised in the income statement when the
shareholder's right to receive payment has been established.
Interest income from bank deposit accounts is accrued on a time
basis calculated by reference to the principal on deposit and
effective interest rate applicable.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of
exchange at the date of the transaction. Monetary assets and
liabilities in foreign currencies are translated into pounds
sterling at the financial reporting year end rates. Non monetary
items that are measured in terms of historical cost in a foreign
currency are not re-translated. The results of overseas subsidiary
undertakings, associates and trade investments are translated into
pounds sterling at average rates for the year unless exchange rates
fluctuate significantly during that year in which case exchange
rates at the date of transactions are used.
The closing balance sheets are translated at the year end rates
and the exchange differences arising are transferred to the group's
translation reserve as a separate component of equity and are
reported within the consolidated statement of changes in equity.
All other exchange differences are included within the consolidated
income statement in the year. In accordance with IFRS 1, the
translation reserve has been set to zero at the date of transition
to IFRS.
Operating profit
Operating profit is defined as the profit for the year from
continuing operations after all operating costs and income but
before finance income, finance costs, and taxation. Operating
profit is disclosed as a separate line on the face of the income
statement.
Normalised operating profit is the same as the above but
excludes non-recurring items, for example profit on the sale of
property. Normalised operating profit is reconciled to operating
profit on the face of the income statement.
Other gains and losses
Other gains and losses are material items that arise from
unusual non-recurring events. They are disclosed separately, in
aggregate, on the face of the income statement after operating
profit where, in the opinion of the directors, such disclosure is
necessary in order to fairly present the results for the financial
period.
Finance costs
Finance costs are recognised in the income statement on the
accruals basis in the year in which they are incurred.
3. Use of critical accounting assumptions and estimates
Estimates and judgements are continually evaluated and assessed
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
given the circumstances prevailing when the accounts are
approved.
The group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The directors are not aware of
any estimates and assumptions that have significant risk of causing
a material adjustment to the carrying value of assets and
liabilities.
4. Segmental information
Revenue Operating Depreciation EBITDA Net assets
continuing profit (loss) and loss
operations continuing (profit)
operations on sale
of plant
and equipment
GBP GBP GBP GBP GBP
Classes of
business
Engineering:
September
2016 730,468 40,043 39,000 79,043 233,063
September
2015 781,372 17,104 39,000 56,104 251,905
March 2016 1,425,101 (36,813) 76,912 40,099 183,086
Tourism and
serviced
units:
September
2016 2,189,324 367,718 473,430 841,148 6,312,883
September
2015 1,614,069 203,988 402,529 606,517 5,937,012
March 2016 3,680,110 642,507 818,309 1,460,816 5,219,364
Investment
and
development
property:
September
2016 3,964 (88,289) 11,249 (77,040) 4,025,896
September - - - - -
2015
March 2016 - 126,137 17,705 143,842 3,799,978
Management:
September
2016 - 257,438 - 257,438 2,684,432
September
2015 - (714,615) 70 (714,545) 6,958,782
March 2016 - (698,371) 140 (698,231) 2,858,095
Total:
September
2016 2,923,756 576,910 523,679 1,100,589 13,256,274
September
2015 2,395,441 (493,523) 441,599 (51,924) 13,147,699
March 2016 5,105,211 33,460 913,066 946,526 12,060,523
Geographical
segments
United
Kingdom:
September
2016 774,970 16,814 39,000 55,814 827,884
September
2015 840,731 (135,605) 39,070 (96,535) 1,984,024
March 2016 1,515,725 (468,844) 77,052 (391,792) 530,105
Africa:
September
2016 2,144,822 112,932 473,430 586,362 6,048,740
September
2015 1,554,710 27,767 394,309 422,076 3,719,519
March 2016 3,589,486 276,840 818,309 1,095,149 5,107,786
Malta and
Rest of the
World:
September
2016 3,964 447,164 11,249 458,413 6,379,650
September
2015 - (385,685) 8,220 (377,465) 7,444,156
March 2016 - 225,464 17,705 243,169 6,422,632
Total:
September
2016 2,923,756 576,910 523,679 1,100,589 13,256,274
September
2015 2,395,441 (493,523) 441,599 (51,924) 13,147,699
March 2016 5,105,211 33,460 913,066 946,526 12,060,523
5. Investment activities and other income
September September March
2016 2015 2016
GBP GBP GBP
Income from current asset
investments 78,195 72,459 91,907
Profit (loss) on sale of
current asset investments 20,733 (9,497) (37,098)
(Increase) in provision on
current asset investments (12,135) (32,735) (32,735)
Net foreign exchange gain
(loss) 327,589 (248,755) 6,509
Current assets investment
valuation movement 225,248 (142,060) (163,956)
Investment and development
property valuation movement - - 351,580
639,630 (360,588) 216,207
---------------- ---------------- ----------------
6. Finance income
September September March
2016 2015 2016
GBP GBP GBP
Bank deposits 901 14,103 25,846
----------------- --------------- ---------------
7. Finance costs
September September March
2016 2015 2016
GBP GBP GBP
Bank loans 214,553 234,473 448,980
Finance leases 632 4,539 8,869
215,185 239,012 457,849
------------------ ----------------- -----------------
8. Earnings (loss) per share
The earnings per share has been calculated by reference to the
weighted average number of ordinary shares of 10p each in issue of
7,631438 (September 2015: 7,607,755) (March 2016: 7,609,083) which
excludes own shares held. The share options in issue have no
dilutive effect on the weighted average number of ordinary
shares.
9. Property, plant and equipment
Freehold Leasehold Plant and Investment Total
land and land and equipment and development
buildings buildings property
under 50
years
GBP GBP GBP GBP GBP
Cost
At 1 April
2016 2,265,823 9,794,062 3,564,617 2,098,769 17,723,271
Exchange
differences 283,907 1,002,328 325,203 190,161 1,801,599
Additions 49,820 553,893 52,907 123,038 779,658
Disposals - ( 2,463) ( 5,037) - ( 7,500)
At 30
September
2016 2,599,550 11,347,820 3,937,690 2,411,968 20,297,028
--------------------- ---------------------- ---------------------- ----------------------- -------------------
Depreciation
At 1 April
2016 31,955 2,712,244 - 2,151,517 4,895,716
Exchange
differences 3,481 221,429 - 192,322 417,232
Charge for
year 13,738 256,972 - 252,361 523,071
Disposals - - - ( 306) ( 306)
At 1 April
2016 49,174 3,190,645 - 2,595,894 5,835,713
--------------------- ---------------------- ---------------------- ----------------------- -------------------
Carrying
value
September
2016 2,550,376 8,157,175 3,937,690 (183,926) 14,461,315
March 2016 2,233,868 7,081,818 3,564,617 (52,748) 12,827,555
10. Current asset investments
September September March
2016 2015 2016
GBP GBP GBP
Listed investments 1,749,653 1,862,098 1,504,486
Unlisted investments 6,000 27,136 18,136
---------- ---------- ----------
1,755,653 1,889,234 1,522,622
---------- ---------- ----------
Investments are carried at fair value at the balance sheet
date.
11. Called-up share capital
September September March
2016 2015 2016
GBP GBP GBP
Issued and fully paid:
8,335,413 ordinary shares
of 10p each 833,541 833,541 833,541
---------- ---------- --------
The company retains as treasury shares 693,648 ordinary shares
of 10 pence at a cost of GBP915,616. The company did not buy back
any shares for cancellation during the year. The company has one
class of ordinary shares, which carry no right to fixed income.
12. Cash generated from operations
September September March
2016 2015 2016
GBP GBP GBP
Operating profit (loss) continuing
operations 576,910 (493,523) 33,460
Depreciation 523,071 440,767 918,920
Loss (profit) on the sale of
property, plant and equipment 608 832 (5,854)
(Profit) loss on sale of current
asset investments (20,733) 9,497 37,098
Fair value movement of investments (225,248) 142,060 (187,624)
Provision on current asset investments 12,135 32,735 32,735
Exchange differences (234,447) 106,860 (433,966)
------------------ ------------------ -----------------
Cash generated from operations
before movements in working capital 632,296 239,228 394,769
Operating leases 4,338 (3,137) (54,421)
(Increase) decrease in inventories (125) (1,904) (6,133)
(Increase) in trade and other
receivables (535,274) (195,751) (606,289)
Increase (decrease) in trade
and other payables 524,434 (7,568) (9,475)
Cash generated from operations 625,669 30,868 (281,549)
------------------ ------------------ -----------------
13. Analysis of net funds (debt)
September September March
2016 2015 2016
GBP GBP GBP
Cash and cash equivalents 1,771,745 4,418,838 2,183,225
Bank loans and overdrafts (2,067,491) (1,663,368) (2,049,180)
------------ ------------ -------------
(295,746) 2,755,470 134,045
Bank loans - non-current (3,503,549) (3,652,976) (3,413,624)
Obligations under finance leases - (17,181) (1,934)
Other loans - (793,787) -
Net (debt) funds (3,799,295) (1,708,474) (3,281,513)
------------ ------------ -------------
14. Significant investment in subsidiaries
Percentage Principle activities
of ordinary
share capital
held
Industrial:
Bailey Industrial Engineering Engineering
Limited (UK) 100%
Leisure:
Bay Travel Limited (UK) 100% Travel agency
Industrial Investment Corporation 100% Operation of
SA Property (Proprietary) Limited hotel
(South Africa)
St. George's Bay Hotel Limited 99% Operation of
(Malta) hotel
Leonardo Da Vinci Knowledge Tourism Property development
Ltd (Malta) 99%
IIC (Malta) Ltd (Malta) 100% Property development
Cordura Limited (Tanzania) 100% Operation of hotel
and safari camps
Kimbiji Bay Limited (Tanzania) 100% Property development
Other activities:
Industrial Investment Corporation 100% Holding company
Limited (Bermuda)
Kimbiji Bay Limited (Malta) 100% Holding company
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKKDNABDDOBB
(END) Dow Jones Newswires
December 21, 2016 02:00 ET (07:00 GMT)
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