RNS Number:4220V
Hercules Property Services PLC
16 February 2004
16 February 2004
Hercules Property Services plc
Interim Results for the six months ended 31 December 2003
Hercules Property Services plc ("Hercules", "the Company" or "the Group"), the
property insurance and services group, announces interim results for the six
months ended 31st December 2003.
Financial highlights:
*Profit before tax grew 81% to #1.3m (2002: #0.7m)
*operating profit improved 17% to #2.0m (2002: #1.7m)
*Profit pre-amortisation, LTIP and after interest #3.3m (2002: #3.0m)(see note 3)
*Turnover grew 2% to #18.9m (2002: #18.4m)
*Debt reduced to #33.9m (30 June 2003: #36.9m)
*Basic EPS 1.6p (2002: -1.1p)
*Interim dividend 1.6p (2002: 1.5p)
Operational highlights:
*The development of all divisions progressed well throughout the period
*Insurance division reported first half growth of 28%
*Commercial property services division exceeded management expectations
*Improved divisional cross-selling
*Confident outlook for second half
Commenting on the results, Larry Lipman, Chairman of Hercules said:
"We are pleased to report real progress in the development of all divisions
within the Group. Most significantly our insurance division, which reported
first half growth of over 28% as we continue to build market share within our
chosen niches.
"In the light of the strengthened positions of our divisions, we are confident
of the Group's performance in the second half of this year and in the continued
profitable growth of our business."
For further information:
Rob Plumb, Hercules Property Services plc: 020 8420 7600
Richard Sunderland, mj2 ltd: 020 7491 7776
Notes to Editors:
Hercules Property Services PLC (HPS.L) is a leading property insurance,
management and consultancy group. It provides a comprehensive range of
specialised services, including: insurance to the commercial and residential
property sectors; property management; and advice on commercial developments.
More information can be found on the internet at www.hercules-group.co.uk
CHAIRMAN'S STATEMENT
For the six-month period ended 31 December 2003, operating profit improved 17%
from the equivalent period in 2002 to #2.0m (2002: #1.7m). During that period,
turnover grew 2% from #18.4m to #18.9m.
Profit before tax for the half year was #1.3m (2002: #0.7m). Profit before tax,
amortisation and LTIP expense (note 3) was #3.3m (2002: #3.0m). Basic earnings
per share were 1.6p (2002: basic loss per share 1.1p) and adjusted earnings per
share, which excludes amortisation and provision for the Long Term Incentive
Plan were 12.9p (2002: 11.7p).
The Board is recommending an interim dividend of 1.6p (2002 1.5p). This will be
payable on 5 July 2004 to all shareholders on the register at close of business
on 21 May 2004.
The interim dividend will also be subject to the scrip dividend mandate, which
was sent out in December 2002. Shareholders will be advised of their rights and
the election price at the appropriate time.
Operations
We are pleased to report real progress in the development of all divisions
within the Group. Most significantly our insurance division has reported first
half growth of over 28% as we continue to build market share within our chosen
niches.
Insurance
Of particular note, Deacon, which provides insurance services to the residential
and secondary property sectors, has made a substantial improvement over the
period. Most encouragingly, both Deacon's client retention rates and margins
have continued to strengthen, giving us every confidence of a sustained
improvement in their performance.
We are also pleased with the performance of our commercial property insurance
broker, Cadogan, which has continued to expand its client base throughout the
period. Similarly Farr and D.O.R. (Northern) which make up our Social Housing
Insurance division, have continued to be successful in growing their business.
In the second half of this financial year the two operations will be integrated
and will trade as Farr, to provide continuity of branding and increase
efficiency going forward.
Commercial Property
The performance of our commercial property services division, made up
principally of Dunlop Heywood Lorenz, has exceeded our expectations. We did not
expect to repeat the exceptional performance, which resulted from the completion
of a 5-year development project in the period to 31 December 2002. Against this
backdrop the division's performance, led by the professional and management
departments, is extremely encouraging.
Auctions
During the period we succeeded in unifying the profile of our residential and
commercial auction houses under the single brand name of Harman Healy. In the
context of a difficult vendor market, particularly in the commercial arena, we
are pleased with the performance of this division.
Residential Management
Our residential management division has continued to undergo some major
restructuring during the period. We are pleased with the significant progress we
have made both in terms of the establishment of a new management team and the
upgrading of our systems and infrastructure.
Prospects
Whilst there remains a degree of uncertainty about the UK property market, we
are confident that we have restored stability to those areas of our business
where it was needed. We remain optimistic about the growth prospects in both our
social housing and residential insurance markets. We are also seeing a gradual
improvement in tenancy demand in our commercial property division.
In the light of these strengthened positions we are confident of the Group's
performance in the second half of this year and in the continued profitable
growth of our business.
Larry Lipman
Chairman
16 February 2004
Consolidated profit and loss account
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 31 30 June
December December
2003 2002 2003
#'000 #'000 #'000
TURNOVER: acquisitions - 330 658
continuing operations 18,871 18,108 41,022
18,871 18,438 41,680
Cost of sales: (109) (88) (707)
GROSS PROFIT 18,762 18,350 40,973
Other administrative expenses (14,740) (14,352) (30,847)
Amortisation ofgoodwill (2,047) (2,006) (4,152)
Long Term Incentive Plan (LTIP) - (300) -
Total administrative expenses (16,787) (16,658) (34,999)
OPERATING PROFIT/(LOSS): acquisitions - (29) (37)
continuing operations 1,975 1,721 6,011
1,975 1,692 5,974
Interest receivable and similar income 301 800 1,164
Interest payable and similar charges (984) (1,777) (2,858)
Profit on ordinary activities before
taxation 1,292 715 4,280
Tax on profit on ordinary activities (1,002) (906) (2,529)
Profit/(Loss) on ordinary activities
after taxation 290 (191) 1,751
Equity dividends (290) (272) (1,450)
Retained profit/(loss) for the financial
period - (463) 301
Basic earnings/(loss) per share 1.6p (1.1p) 9.7p
Adjustment for goodwill and LTIP 11.3p 12.8p 22.9p
Adjusted earnings per share 12.9p 11.7p 32.6p
Diluted earnings/(loss) per share 1.6p (1.1p) 9.6p
Adjusted diluted earnings per share 12.7p 11.8p 32.5p
Taxation has been calculated using an estimated annual effective rate before
amortisation of goodwill of 30% (six months to 31 December 2002 - 30%, year
ended 30 June 2003 - 30%).
The interim financial information has neither been audited nor reviewed and does
not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985.
The accounts for the year to 30 June 2003 set out above are abridged from the
Company's statutory accounts. The full accounts incorporating an unqualified
auditors' report and containing no statement under section 237 (2) and (3) of
the Companies Act 1985, have been filed with the Registrar of Companies. The
interim dividend will be payable on 5 July 2004 to members on the register on 21
May 2004.
Consolidated balance sheet
Unaudited Unaudited Audited
3131 30 June
December December
2003 2002 2003
#'000 #'000 #'000
FIXED ASSETS
Intangible fixed assets 68,549 72,419 70,586
Tangible fixed assets 10,686 10,519 10,757
79,235 82,938 81,343
CURRENT ASSETS
Stock and work in progress 4,309 4,781 4,183
Debtors 17,869 15,469 26,028
Investments 5 7 5
Cash at bank and in hand 10,032 11,221 15,630
32,215 31,478 45,846
CREDITORS: amounts falling due within
one year (25,697) (21,126) (38,379)
NET CURRENT ASSETS 6,518 10,352 7,467
TOTAL ASSETS LESS CURRENT 85,753 93,290 88,810
LIABILITIES
CREDITORS: amounts falling due after
more than one year (28,118) (36,113) (31,185)
PROVISIONS FOR LIABILITIES AND CHARGES (568) (591) (575)
NET ASSETS 57,067 56,586 57,050
CAPITAL AND RESERVES
Called up equity share capital 907 906 906
Shares to be issued 954 1,254 954
Share premium account 58,074 58,058 58,058
Profit and loss account (1,529) (2,293) (1,529)
Merger reserve (1,339) (1,339) (1,339)
EQUITY SHAREHOLDERS' FUNDS 57,067 56,586 57,050
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 31 30 June
December December
2003 2002 2003
Note #'000 #'000 #'000
Net cash (outflow)/inflow from
operating activities 1 (266) (19,654) 13,709
Returns on investments and servicing
of finance (683) (977) (1,694)
Taxation (1,190) (1,555) (2,887)
Capital expenditure and financial
investment (294) (675) (1,378)
Acquisitions and disposals (817) (1,116) (25,930)
Equity dividends paid (271) (416) (2,167)
Cash outflow before financing (3,521) (24,393) (20,347)
Financing (2,077) (1,612) (1,249)
Decrease in cash in the period (5,598) (26,005) (21,596)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Unaudited Unaudited Audited
6 months 6 months 12
months
ended ended ended
31 31 30 June
December December
2003 2002 2003
Note #'000 #'000 #'000
Decrease in cash in the period (5,598) (26,005) (21,596)
Cash inflow from increase in debt and
lease financing 2,901 1,702 1,339
Change in net debt resulting from
cash flows (2,697) (24,303) (20,257)
Capitalised loan arrangement fees 231 - -
Amortisation of loan issue costs (84) - (154)
(2,550) (24,303) (20,411)
Net debt brought forward (21,279) (868) (868)
Net debt carried forward 2 (23,829) (25,171) (21,279)
NOTES TO THE INTERIM ACCOUNTS
1.RECONCILIATION OF OPERATING PROFIT FOR THE PERIOD TO NET CASH (OUTFLOW)/INFLOW
FROM OPERATING ACTIVITIES
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2003 2002 2003
#'000 #'000 #'000
Operating profit 1,975 1,692 5,974
Shares to be issued - 300 -
Depreciation charge 365 507 658
Decrease in provision (7) (15) (31)
Amortisation of goodwill 2,047 2,006 4,152
(Increase)/decrease in stocks (126) (21) 577
Decrease/(increase) in debtors 8,159 4,721 (5,491)
(Decrease)/increase in creditors (12,532) (28,844) 7,716
Capitalised loan arrangement fees (231) - -
Amortisation of loan issue costs 84 - 154
Net cash (outflow)/ inflow from
operating activities (266) (19,654) 13,709
2.ANALYSIS OF NET DEBT
At Cash Loan At
1 July flow Issue 31 December
2003 #'000 costs 2003
#'000 #'000 #'000
Cash at bank and in hand 15,630 (5,598) - 10,032
Debt due within one year (5,724) (19) - (5,743)
Debt due after one year (31,185) 2,920 147 (28,118)
(21,279) (2,697) 147 (23,829)
3.PROFIT BEFORE TAX, AMORTISATION AND LONG TERM INCENTIVE PLAN COSTS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2003 2002 2003
#'000 #'000 #'000
Profit on ordinary activities before
taxation 1,292 715 4,280
Amortisation 2,047 2,006 4,152
Long Term Incentive Plan - 300 -
Profit reported in chairman's statement 3,339 3,021 8,432
This information is provided by RNS
The company news service from the London Stock Exchange
END
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