TIDMFRM
RNS Number : 5769O
Formation Group PLC
29 May 2015
Formation Group PLC ("Formation" or "the Group")
Interim Results for the Six Months ended 28 February 2015
The Group is pleased to announce its interim results for the six
months ended 28 February 2015. Formation Group is now predominately
a property development and project management company providing
professional services to its clients within this sector.
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HIGHLIGHTS
-- Revenue from continuing operations of GBP10.78 million (2014: GBP3.23m).
-- Operating profit from continuing operations of GBP0.266 million (2014: GBP0.145m loss).
-- Cash position as at 28 February 2015 of GBP1.707 million (31 August 2014 GBP0.328m).
-- Completed on acquisition site for development 159-161 Iverson
Road, London utilising GBP2.408 million of funds from repayment of
its investment in J V Finance Ltd.
-- Received GBP1.551 million further cash repayment from its investment in J V Finance Ltd.
Post Period End Events
-- Balance of GBP1.268 million, of the GBP6.229 million due was
received from J V Finance Ventures Limited. .
-- Addition of two further experienced directors to the board.
Outlook
-- The Group is trading in line with management's expectations
and the board remains confident about the Group's prospects for the
remainder of the year.
Enquiries:
Formation Group Plc:
David Kennedy; Chief Executive Officer - 020 7920 7590
NOMAD to Formation Group Plc:
Zeus Capital Limited - 0161 831 1512
Ross Andrews
Andrew Jones
Chairman's Statement
I am pleased to report the Group's results for the six months
ended 28 February 2015.
Since the period end the balance of GBP1.268m due to Formation
from J V Finance Limited has been received. The group turnover has
grown materially due to its increasing order book on Project
Management contracts. Additionally, Formation has now completed on
the purchase of the Iverson Road development as previously
announced. The board believes that the future prospects of the
group will be materially enhanced by property development on its
own or via joint venture agreements as such potential opportunities
are actively sourced.
William O'Dea
Non-Executive Chairman
29 May 2015
Chief Executive Officer's Report
Overview
Revenue for the period was GBP10.78 million from continuing
operations (2014 GBP3.23 million) and operating profit from
continuing operations was GBP0.266 million (2014 GBP0.145 million
loss).
The increased revenue for the period is due mainly to the
increasing order book which includes some larger project management
contracts in Finchley, Harrow and South London. At the end of
February 2015, Formation had in excess of nine on-going contracts
and expects to have an additional two new contracts starting soon
after.
The increase in gross profit margin in the period is largely due
to the increased stream of project management income deriving from
the additional contracts.
In line with the Group's current dividend policy, no interim
dividend is being declared. However the Directors will review the
position at the time of the Preliminary results for the year ending
31 August 2015.
Project Management Division
-Formation Design & Build Limited
The company is now working on two larger size contracts after a
short period of inactivity and will continue to source contracts to
boost profitability.
-Formation Construction Limited
This company was formed in early 2012, to project manage
construction work and has substantially increased its revenue. At
present the company is managing in excess of six projects and will
be starting a further two projects post period end with the aim of
increasing profitability.
Property Development Division
-Formation Homes (London) Ltd
As previously announced, Formation Homes has acquired the
development site in Iverson Road using a mixture of development
funding and cash from the Groups resources. The scheme comprises 19
residential units and 1 commercial unit building works has now
commenced and this development is expected to complete in April
2016.
Discontinued Operations
-FG Bradford & FG Bristol Ltd
As previously announced, Dunbar Assets plc have taken management
of the properties at FG (Bristol) Limited and FG (Bradford) Limited
and are actively marketing these properties with a view to sell.
The properties have been funded on a non-recourse basis and any
subsequent disposal will be cash neutral for Formation. Further
details are set out in notes 3 and 9 to the interim accounts.
Risks and Uncertainties
It is important to the board that we continue to provide all our
shareholders with a balanced view of the business including its
risks and uncertainties.
The Group's core activity is now Project Management &
Property Development and in doing so has utilised a large part of
the return of its J V investment funds to purchase and develop
properties. The Group expects that profits from property
development division will form a substantial part of its
profitability in the future..
Outlook
Formation Group has now added property development activity to
its project management business and believes that this will enhance
shareholder value in the medium term. The Group will continue to
source additional development opportunities and the board views the
current year with confidence.
David Kennedy
Chief Executive Officer
29 May 2015
The interim accounts will be published on the company's website
www.formationgroupplc.com
Consolidated income statement
For the six months ended 28 February 2015
6 months ended 6 months ended Year ended
28 Feb. 2015 28 Feb. 2014 31 Aug. 2014
Note (Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 2 10,780 3,228 7,941
Cost of sales (9,736) (2,987) (7,149)
Gross profit 1,044 241 792
Administrative expenses (778) (386) (861)
Operating profit/ (loss) from continuing operations 2 266 (145) (69)
Finance costs - (28) (30)
Profit/(loss) before taxation 266 (173) (99)
Taxation 4 - - -
Profit/(loss) for the financial period from
continuing operations 266 (173) (99)
Discontinued operations
Loss for the financial period from discontinued
operations 3 (9) (2) (421)
Profit/ (loss) for the financial period 257 (175) (520)
Attributable to:
Owners of parent 257 (175) (520)
257 (175) (520)
Earnings per share
From continuing operations
Basic 5 0.12p (0.04p) (0.05p)
Diluted 5 0.12p (0.04p) (0.05p)
From discontinued operations
Basic 5 - (0.01p) (0.20p)
Diluted 5 - (0.01p) (0.20p)
From continuing and discontinued operations
Basic 5 0.12p (0.085p) (0.25p)
Diluted 5 0.12p (0.085p) (0.25p)
A separate consolidated statement of comprehensive income for
Formation Group Plc has not been presented as there are no items to
be recognised within it.
Consolidated statement of financial position
As at 28 February 2015
28 Feb. 2015 28 Feb. 2014 31 Aug. 2014
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and
equipment 299 286 290
Investments accounted for
using the equity method 1,268 6,238 4,648
1,567 6,524 4,938
Current assets
Inventories 8 6,905 - 707
Trade and other
receivables 3,167 687 2,215
Cash and cash equivalents 1,707 78 328
11,779 765 3,250
Assets included in
Formation (LSE:FRM)
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