TIDMTEF
RNS Number : 1192X
Telford Homes PLC
01 December 2010
+-------------------------------+-------------------------------+
| Press Release | 1 December 2010 |
+-------------------------------+-------------------------------+
Telford Homes Plc
('Telford Homes' or the 'Group')
Interim results for the six months ended 30 September 2010
Telford Homes Plc (AIM:TEF), the residential developer in East London noted for
regeneration projects within public sector partnerships, today announces its
interim results for the six months ended 30 September 2010.
Highlights
+----------+-----------------------------------------------------------+
| · | Revenue for the six months ended 30 September 2010 was |
| | GBP58.2 million (H1 2009: GBP85.9 million), in line with |
| | expectations for the year given the Group's policy during |
| | the recession of not acquiring new land |
+----------+-----------------------------------------------------------+
| · | Profit before tax and after exceptional items was GBP2.0 |
| | million (H1 2009: GBP5.7 million) |
+----------+-----------------------------------------------------------+
| · | 133 open market homes legally completed (H1 2009: 224 |
| | homes) |
+----------+-----------------------------------------------------------+
| · | Interim dividend of 1.25 pence per share (H1 2009: 0.75 |
| | pence) reflecting the Board's confidence in future growth |
+----------+-----------------------------------------------------------+
| · | Over 250 new sales achieved since 1 April 2010 despite |
| | the lack of mortgage finance and an uncertain economic |
| | outlook |
+----------+-----------------------------------------------------------+
| · | Cash balances remain strong at GBP22.0 million (31 March |
| | 2010: GBP33.6 million) including GBP11.6 million of HCA |
| | grant held for future expenditure |
+----------+-----------------------------------------------------------+
| · | Total borrowings at 30 September 2010 were GBP75.6 |
| | million (31 March 2010: GBP70.8 million), with gearing |
| | remaining at historically low levels |
+----------+-----------------------------------------------------------+
| · | The placing which raised GBP7.5 million in February 2010 |
| | has enabled land acquisition, adding to the development |
| | pipeline for future years |
+----------+-----------------------------------------------------------+
Andrew Wiseman, Chief Executive of Telford Homes, commented: "As a result of the
cautious approach to land acquisition that the Board adopted, we have
successfully weathered the downturn, and the Group's diversified business model
has allowed us to continue to build affordable housing and limit our exposure to
the market. As expected, profits are reduced as the development pipeline was
scaled back in response to market conditions; however the placing earlier this
year has already enabled the Group to recommence investment in land, and this
positions us well for future growth.
"I am very pleased to announce the appointment of Jon Di-Stefano as Chief
Executive of Telford Homes with effect from July 2011, as I move to the role of
Executive Chairman."
- Ends -
For further information:
+------------------------------------+-------------------------+
| Telford Homes Plc | |
+------------------------------------+-------------------------+
| Andrew Wiseman, Chief Executive | Tel: +44 (0) 1992 809 |
| | 800 |
+------------------------------------+-------------------------+
| Jon Di-Stefano, Financial Director | www.telfordhomes.plc.uk |
+------------------------------------+-------------------------+
+------------------------------------+------------------------+
| Shore Capital | |
+------------------------------------+------------------------+
| Graham Shore / Pascal Keane | Tel: +44 (0) 20 7468 |
| | 7910 |
+------------------------------------+------------------------+
Media enquiries:
+------------------------------------+------------------------+
| Abchurch | |
+------------------------------------+------------------------+
| Henry Harrison-Topham / Joanne | Tel: +44 (0) 20 7398 |
| Shears | 7709 |
+------------------------------------+------------------------+
| joanne.shears@abchurch-group.com | www.abchurch-group.com |
+------------------------------------+------------------------+
Copies of this announcement are available from the Group at First Floor, Stuart
House, Queensgate, Britannia Road, Waltham Cross, Hertfordshire EN8 7TF and on
our website www.telfordhomes.plc.uk.
CHIEF EXECUTIVE'S STATEMENT
The housing market in East London has remained steady but subdued due to a lack
of mortgage finance for potential customers and an uncertain economic outlook.
The increasing shortage of new homes in London will create opportunities for
long-term growth and the Group is well positioned to take advantage of those
opportunities over the next few years.
Results for the six months ended 30 September 2010
Revenue for the six months ended 30 September 2010 was GBP58.2 million (H1 2009:
GBP85.9 million) with a total of 133 open market homes legally completed (H1
2009: 224 homes). This reduction is in line with expectations for the year
given the Group's strategy during the recession. During 2008 and 2009 the Group
did not acquire new land which significantly reduced the potential output of
completed homes from 2010 to 2012. This enabled the Board to maintain cash
balances at healthy levels and to plan for the longer term growth of the
business.
Gross profit before exceptional items was GBP7.5 million (H1 2009: GBP12.6
million) which is stated after expensing loan interest which had been
capitalised within inventories of GBP1.4 million (H1 2009: GBP3.2 million).
Gross margin before exceptional items and interest was 15.2 per cent (full year
to 31 March 2010: 16.5 per cent). This remains below the target margin under
normal market conditions and reflects the policy during the recession of
constructing some developments entirely for affordable housing which resulted in
lower margins commensurate with the risk taken. These developments will be
completed during 2011.
Profit before tax and after exceptional items was GBP2.0 million (H1 2009:
GBP5.7 million). No land write downs have been required since the first half of
last year as both the rate of sales and the prices being achieved have been
maintained at expected levels over the last 12 months. Reported profits up to
March 2012 are expected to remain at lower levels due to the land acquisition
policy during the recession, but the placing funds raised earlier this year are
helping the Group to buy land and add to the development pipeline for future
years.
Dividend
As reported in our results for the year to 31 March 2010, the Board intends to
maintain a progressive dividend policy over the coming years in keeping with
longer term expectations. This will be kept under review depending on market
conditions but will not be affected by anticipated shorter term fluctuations in
profits.
Despite a cautious approach to the current economic environment the Board
remains confident of the Group's potential growth in future years and as a
result has declared an interim dividend of 1.25 pence per share (H1 2009: 0.75
pence). The interim dividend is expected to be paid on 14 January 2011 to those
shareholders on the register at the close of business on 17 December 2010.
Sales
The Group has achieved over 250 new sales since 1 April 2010 assisted by
successful overseas sales events. These events have resulted in sales being
secured on some developments up to two years ahead of build completion,
particularly at Matchmakers Wharf, E9. Securing sales now which will complete
in future years is encouraging and underpins greater investment in future
developments. As a result this will remain part of the marketing strategy in
2011 although the business will continue to plan for an environment where
pre-sales are not achieved.
In addition to the overseas sales a steady rate of new sales to owner-occupiers
and, to a lesser extent, investors has continued throughout the last few months
in line with management expectations. The rental market in East London is
strong and investors can achieve a good rate of return both on their existing
portfolios and where they are able to finance any new purchases. The Group has
three active sales centres at Greenwich Creekside, Queen Mary's Gate in Woodford
and Vellum in Walthamstow and visitor levels have remained modest but
consistent. Although each prospective purchaser is cautious and takes an
increased amount of time before committing to a purchase, the rate of
cancellation or failure to complete from more recent sales is now extremely low.
Although there is a shortage of supply of new housing in London, demand remains
constrained by the restricted availability of mortgage finance. This
particularly impacts first time buyers and investors. The Board anticipates
that mortgage availability may not see any significant improvement before early
2012 and as such this will continue to restrain the housing market.
Acquisition of joint venture interest
Since January 2010 the Group has been negotiating with The Royal Bank of
Scotland ("the Bank") to acquire their 50 per cent interest in Telford Homes
(Creekside) Limited, the joint venture set up to develop Greenwich Creekside.
This interest was acquired on 17 September 2010 for the sum of GBP500 with all
existing equity injected by the Bank being converted to debt on the same date.
As part of this agreement a full funding package has also been agreed with the
Bank such that the second phase of the development is now under construction
with completions expected during 2012. Handovers on the first phase have
already commenced with the majority of completions due during 2011. This
acquisition will enhance profits in future years and on 17 September 2010 the
Group recognised a 'bargain gain' of GBP511,000 representing the value of 50% of
the net assets of Telford Homes (Creekside) Limited on that date less the GBP500
purchase price. This gain is shown as an exceptional item in the income
statement to 30 September 2010.
Partnerships
Telford Homes' status as a grant partner of the Homes and Communities Agency
("HCA") remains a significant strength. The Group's secured grant programme of
GBP73 million is now well advanced with the first sites supported through this
partnership due to complete in the next few months. There will be a significant
reduction in the availability of grant funding in the future and the Group is
not acquiring any new sites where grant is a requirement of the scheme until the
levels available become more certain. Telford Homes' relationship with the HCA
and proven ability to keep to a programme for delivering finished homes puts the
Group in the best possible position to secure future grant allocations.
The Group also has excellent relationships with housing associations both in
terms of the delivery of affordable housing and partnership arrangements to
develop land within their ownership. The partnership with Eastend Homes
continues to be a great success with affordable housing now under construction
on the St Georges Estate, E1, Bede Estate, E3 and Eric and Treby Estate, E3. In
addition the Group holds options to purchase and develop a number of sites on
all three estates for open market housing either directly or through joint
venture arrangements. In recent months the Group has exercised some of these
options and commenced construction on two open market sites on the St Georges
Estate. The remaining options will be exercised over the next two years
depending on market conditions. Plans are being progressed on a further three
estates with Eastend Homes.
Development pipeline
At 30 September 2010, the total pipeline of open market and affordable
properties not yet legally completed was 2,041 (31 March 2010: 2,370) including
2,017 with planning permission. This total includes sites under option
contracts within the control of the Group. Of these properties 1,397 are under
construction and a total of 925 had been secured by contracts exchanged either
for open market sale or for affordable housing by 30 September 2010.
Cash and borrowings
Total borrowings at 30 September 2010 were GBP75.6 million including GBP8.0
million representing the former equity interest of The Royal Bank of Scotland in
Telford Homes (Creekside) Limited. Cash balances remain healthy at GBP22.0
million (31 March 2010: GBP33.6 million) including GBP11.6 million of HCA grant
held for future expenditure. Gearing of 83.3% at 30 September 2010 remains
historically low and the Board continues to take a careful approach to the level
of debt within the business. The impact on levels of debt and gearing and
ensuring these remain well within acceptable levels is a key consideration in
any land acquisition.
For some time the Group has been seeking to agree a new corporate banking
facility with a 'club' of banks that would replace existing site by site
facilities secured on a bilateral basis. Although the Group's existing
facilities are adequate there is limited scope for investment in new
developments. The Board is delighted to report that individual credit approvals
have now been secured from The Royal Bank of Scotland, HSBC and Santander which
would result in a total facility of GBP70 million for a term in excess of three
years. Agreement of a facility is still subject to synchronising terms between
the banks, normal due diligence and a legal agreement and the Board expects this
to be completed early in 2011. The new facility will be secured against the
assets of Telford Homes Plc and be available in addition to funding already
provided to subsidiaries and joint ventures. It will replace existing parent
company borrowings of GBP28.7 million including GBP11.4 million owed to Allied
Irish Bank and therefore give the Group significant headroom for acquiring and
developing new sites over the next few years.
On 30 September 2010 the Group announced that it had repaid all of the
outstanding loan notes in relation to the acquisition of Clifford Contracting
which took place in June 2009. This acquisition provided a form of finance
against unsold properties and would have been available until September 2011.
The rate of sales secured over the last year has resulted in the Board
concluding that this funding will not be required for the remaining twelve
months of its term. The early redemption of the last loan notes will save
interest costs of GBP300,000 and the Group has now repurchased and cancelled the
1,130,089 ordinary shares that formed part of the transaction for a total sum of
GBP1.
Outlook
Given the mortgage market and continuing economic uncertainty the Board is
maintaining a cautious approach to the rate of investment in new developments
and the business as a whole. The number of new sales secured over the last few
months, including overseas sales, has been encouraging and the emerging Olympic
development along with improved infrastructure and associated regeneration is
positioning East London for long-term growth. An ongoing shortage of new homes
in the area will result in opportunities for Telford Homes to be part of that
growth.
Board changes
During the next year the Board has invited me to become Executive Chairman of
Telford Homes, succeeding David Holland. David has been an excellent Chairman
and he will continue to be a non-executive Director and to chair the
remuneration committee.
After ten years as Chief Executive, I am delighted that I will be succeeded by
our Financial Director, Jon Di-Stefano. The new CEO appointment, which will be
effective from our AGM next July, has been planned for the last four years and
Jon has been the outstanding candidate for some time. I look forward to
supporting Jon in a similar way to Jim Furlong's support to me over the last ten
years.
Andrew Wiseman
Chief Executive
30 November 2010
GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010
+---------------------+------+-----------+-----------+-----------+
| |Note | Unaudited | Unaudited | Audited |
| | | 6 months | 6 months | Year |
| | | ended | ended | ended |
+---------------------+------+-----------+-----------+-----------+
| | | 30 | 30 | 31 March |
| | | September | September | 2010 |
| | | 2010 | 2009 | |
+---------------------+------+-----------+-----------+-----------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Revenue | | 58,170 | 85,904 | 159,338 |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Cost of sales | | (50,720) | (73,343) | (138,291) |
| before exceptional | | | | |
| items | | | | |
+---------------------+------+-----------+-----------+-----------+
| Exceptional items | 3 | 511 | (710) | (710) |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Gross profit | | 7,961 | 11,851 | 20,337 |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Administrative | | (4,156) | (4,642) | (9,691) |
| expenses | | | | |
+---------------------+------+-----------+-----------+-----------+
| Selling expenses | | (1,383) | (738) | (1,920) |
+---------------------+------+-----------+-----------+-----------+
| Exceptional items | 3 | - | (70) | (70) |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Operating profit | | 2,422 | 6,401 | 8,656 |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Finance income | | 149 | 190 | 333 |
+---------------------+------+-----------+-----------+-----------+
| Finance costs | | (567) | (851) | (1,651) |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Profit before | | 2,004 | 5,740 | 7,338 |
| income tax | | | | |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Analysed as: | | | | |
+---------------------+------+-----------+-----------+-----------+
| Profit before | | 1,493 | 6,520 | 8,118 |
| income tax and | | | | |
| exceptional items | | | | |
+---------------------+------+-----------+-----------+-----------+
| Exceptional items | 3 | 511 | (780) | (780) |
+---------------------+------+-----------+-----------+-----------+
| | | 2,004 | 5,740 | 7,338 |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Income tax expense | 4 | (422) | (1,635) | (2,019) |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Profit after income | | 1,582 | 4,105 | 5,319 |
| tax | | | | |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Earnings per share: | | | | |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Basic | 6 | 3.3p | 10.6p | 13.7p |
+---------------------+------+-----------+-----------+-----------+
| | | | | |
+---------------------+------+-----------+-----------+-----------+
| Diluted | 6 | 3.3p | 10.5p | 13.5p |
+---------------------+------+-----------+-----------+-----------+
All activities are in respect of continuing operations.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010
+---------------------+---+-----------+-----------+----------+
| | | Unaudited | Unaudited | Audited |
| | | 6 months | 6 months | Year |
| | | ended | ended | ended |
+---------------------+---+-----------+-----------+----------+
| | | 30 | 30 | 31 March |
| | | September | September | 2010 |
| | | 2010 | 2009 | |
+---------------------+---+-----------+-----------+----------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------+---+-----------+-----------+----------+
| | | | | |
+---------------------+---+-----------+-----------+----------+
| Movement in excess | | (9) | 7 | 14 |
| tax on share | | | | |
| options | | | | |
+---------------------+---+-----------+-----------+----------+
| | | | | |
+---------------------+---+-----------+-----------+----------+
| Other comprehensive | | (9) | 7 | 14 |
| (expense) income | | | | |
| net of tax | | | | |
+---------------------+---+-----------+-----------+----------+
| Profit for the | | 1,582 | 4,105 | 5,319 |
| period | | | | |
+---------------------+---+-----------+-----------+----------+
| | | | | |
+---------------------+---+-----------+-----------+----------+
| Total comprehensive | | 1,573 | 4,112 | 5,333 |
| income for the | | | | |
| period | | | | |
+---------------------+---+-----------+-----------+----------+
GROUP BALANCE SHEET
AT 30 SEPTEMBER 2010
+---------------------+----+-----------+-----------+----------+
| | | Unaudited | Unaudited | Audited |
| | | 30 | 30 | 31 March |
| | | September | September | 2010 |
| | | 2010 | 2009 | |
+---------------------+----+-----------+-----------+----------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Non current assets | | | | |
+---------------------+----+-----------+-----------+----------+
| Property, plant and | | 394 | 462 | 380 |
| equipment | | | | |
+---------------------+----+-----------+-----------+----------+
| Deferred income tax | | 29 | 20 | 109 |
| assets | | | | |
+---------------------+----+-----------+-----------+----------+
| | | 423 | 482 | 489 |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Current assets | | | | |
+---------------------+----+-----------+-----------+----------+
| Inventories | | 139,217 | 146,193 | 120,047 |
+---------------------+----+-----------+-----------+----------+
| Trade and other | | 9,469 | 8,158 | 7,638 |
| receivables | | | | |
+---------------------+----+-----------+-----------+----------+
| Cash and cash | | 21,987 | 15,073 | 33,642 |
| equivalents | | | | |
+---------------------+----+-----------+-----------+----------+
| | | 170,673 | 169,424 | 161,327 |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Total assets | | 171,096 | 169,906 | 161,816 |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Non current | | | | |
| liabilities | | | | |
+---------------------+----+-----------+-----------+----------+
| Hire purchase | | (27) | - | - |
| liabilities | | | | |
+---------------------+----+-----------+-----------+----------+
| | | (27) | - | - |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Current liabilities | | | | |
+---------------------+----+-----------+-----------+----------+
| Trade and other | | (30,719) | (27,502) | (27,065) |
| payables | | | | |
+---------------------+----+-----------+-----------+----------+
| Borrowings | | (75,585) | (86,369) | (70,800) |
+---------------------+----+-----------+-----------+----------+
| Current income tax | | (320) | (1,301) | (871) |
| liabilities | | | | |
+---------------------+----+-----------+-----------+----------+
| Hire purchase | | (15) | (1) | - |
| liabilities | | | | |
+---------------------+----+-----------+-----------+----------+
| | | (106,639) | (115,173) | (98,736) |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Total liabilities | | (106,666) | (115,173) | (98,736) |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Net assets | | 64,430 | 54,733 | 63,080 |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Capital and | | | | |
| reserves | | | | |
+---------------------+----+-----------+-----------+----------+
| Issued share | | 4,865 | 4,040 | 4,978 |
| capital | | | | |
+---------------------+----+-----------+-----------+----------+
| Share premium | | 36,837 | 31,125 | 37,357 |
+---------------------+----+-----------+-----------+----------+
| Retained earnings | | 22,728 | 19,568 | 20,745 |
+---------------------+----+-----------+-----------+----------+
| | | | | |
+---------------------+----+-----------+-----------+----------+
| Total equity | | 64,430 | 54,733 | 63,080 |
+---------------------+----+-----------+-----------+----------+
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010 (UNAUDITED)
+--------------------------+---------+---------+----------+--------+
| | Share | Share | Retained | Total |
| | capital | premium | earnings | equity |
+--------------------------+---------+---------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+---------+---------+----------+--------+
| | | | | |
+--------------------------+---------+---------+----------+--------+
| Balance at 1 April 2010 | 4,978 | 37,357 | 20,745 | 63,080 |
+--------------------------+---------+---------+----------+--------+
| Profit for the period | - | - | 1,582 | 1,582 |
+--------------------------+---------+---------+----------+--------+
| Total other | - | - | (9) | (9) |
| comprehensive expense | | | | |
+--------------------------+---------+---------+----------+--------+
| Dividend on equity | - | - | (621) | (621) |
| shares | | | | |
+--------------------------+---------+---------+----------+--------+
| Share-based payments | - | - | 147 | 147 |
+--------------------------+---------+---------+----------+--------+
| Sale of own shares | - | - | 166 | 166 |
+--------------------------+---------+---------+----------+--------+
| Write down in value of | - | - | 71 | 71 |
| own shares | | | | |
+--------------------------+---------+---------+----------+--------+
| Dividend paid on | - | - | 14 | 14 |
| consideration shares | | | | |
+--------------------------+---------+---------+----------+--------+
| Cancellation of own | (113) | (520) | 633 | - |
| shares | | | | |
+--------------------------+---------+---------+----------+--------+
| | | | | |
+--------------------------+---------+---------+----------+--------+
| Balance at 30 September | 4,865 | 36,837 | 22,728 | 64,430 |
| 2010 | | | | |
+--------------------------+---------+---------+----------+--------+
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009 (UNAUDITED)
+--------------------------+---------+---------+----------+--------+
| | Share | Share | Retained | Total |
| | capital | premium | earnings | Equity |
+--------------------------+---------+---------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+---------+---------+----------+--------+
| | | | | |
+--------------------------+---------+---------+----------+--------+
| Balance at 1 April 2009 | 3,875 | 30,345 | 16,085 | 50,305 |
+--------------------------+---------+---------+----------+--------+
| Profit for the period | - | - | 4,105 | 4,105 |
+--------------------------+---------+---------+----------+--------+
| Total other | - | - | 7 | 7 |
| comprehensive income | | | | |
+--------------------------+---------+---------+----------+--------+
| Proceeds of equity share | 165 | 780 | - | 945 |
| issue | | | | |
+--------------------------+---------+---------+----------+--------+
| Share-based payments | - | - | 102 | 102 |
+--------------------------+---------+---------+----------+--------+
| Purchase of own shares | - | - | (312) | (312) |
+--------------------------+---------+---------+----------+--------+
| Sale of own shares | - | - | 142 | 142 |
+--------------------------+---------+---------+----------+--------+
| Write down in value of | - | - | 72 | 72 |
| own shares | | | | |
+--------------------------+---------+---------+----------+--------+
| Option to repurchase own | - | - | (633) | (633) |
| shares | | | | |
+--------------------------+---------+---------+----------+--------+
| | | | | |
+--------------------------+---------+---------+----------+--------+
| Balance at 30 September | 4,040 | 31,125 | 19,568 | 54,733 |
| 2009 | | | | |
+--------------------------+---------+---------+----------+--------+
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2010 (AUDITED)
+--------------------------+---------+---------+----------+--------+
| | Share | Share | Retained | Total |
| | capital | premium | earnings | equity |
+--------------------------+---------+---------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+---------+---------+----------+--------+
| | | | | |
+--------------------------+---------+---------+----------+--------+
| Balance at 1 April 2009 | 3,875 | 30,345 | 16,085 | 50,305 |
+--------------------------+---------+---------+----------+--------+
| Profit for the year | - | - | 5,319 | 5,319 |
+--------------------------+---------+---------+----------+--------+
| Total other | - | - | 14 | 14 |
| comprehensive income | | | | |
+--------------------------+---------+---------+----------+--------+
| Dividend on equity | - | - | (295) | (295) |
| shares | | | | |
+--------------------------+---------+---------+----------+--------+
| Proceeds of equity share | 1,103 | 7,343 | - | 8,446 |
| issue | | | | |
+--------------------------+---------+---------+----------+--------+
| Costs arising from | - | (331) | - | (331) |
| shares issued | | | | |
+--------------------------+---------+---------+----------+--------+
| Share-based payments | - | - | 283 | 283 |
+--------------------------+---------+---------+----------+--------+
| Purchase of own shares | - | - | (312) | (312) |
+--------------------------+---------+---------+----------+--------+
| Sale of own shares | - | - | 149 | 149 |
+--------------------------+---------+---------+----------+--------+
| Write down in value of | - | - | 126 | 126 |
| own shares | | | | |
+--------------------------+---------+---------+----------+--------+
| Option to repurchase own | - | - | (624) | (624) |
| shares | | | | |
+--------------------------+---------+---------+----------+--------+
| | | | | |
+--------------------------+---------+---------+----------+--------+
| Balance at 31 March 2010 | 4,978 | 37,357 | 20,745 | 63,080 |
+--------------------------+---------+---------+----------+--------+
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010
+--------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | 6 months | 6 months | Year |
| | ended | ended | ended |
+--------------------------+-----------+-----------+----------+
| | 30 | 30 | 31 March |
| | September | September | 2010 |
| | 2010 | 2009 | |
+--------------------------+-----------+-----------+----------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------+-----------+-----------+----------+
| Cash flow from operating activities | | |
+--------------------------------------+-----------+----------+
| Operating profit | 2,422 | 6,401 | 8,656 |
+--------------------------+-----------+-----------+----------+
| | | | |
+--------------------------+-----------+-----------+----------+
| Depreciation | 89 | 170 | 288 |
+--------------------------+-----------+-----------+----------+
| Write down in value of | 71 | 72 | 126 |
| own shares | | | |
+--------------------------+-----------+-----------+----------+
| Share-based payments | 147 | 102 | 283 |
+--------------------------+-----------+-----------+----------+
| Profit on sale of | (49) | - | - |
| tangible fixed assets | | | |
+--------------------------+-----------+-----------+----------+
| (Increase) decrease in | (18,512) | 32,818 | 59,565 |
| inventories | | | |
+--------------------------+-----------+-----------+----------+
| (Increase) decrease in | (1,831) | 940 | 1,460 |
| receivables | | | |
+--------------------------+-----------+-----------+----------+
| Increase (decrease) in | 3,462 | (2,997) | (3,308) |
| payables | | | |
+--------------------------+-----------+-----------+----------+
| | (14,201) | 37,506 | 67,070 |
+--------------------------+-----------+-----------+----------+
| Interest paid | (1,033) | (1,956) | (3,483) |
+--------------------------+-----------+-----------+----------+
| Income taxes (paid) | (902) | 8 | (888) |
| received | | | |
+--------------------------+-----------+-----------+----------+
| Cash flow from operating | (16,136) | 35,558 | 62,699 |
| activities | | | |
+--------------------------+-----------+-----------+----------+
| | | | |
+--------------------------+-----------+-----------+----------+
| Cash flow from investing | | | |
| activities | | | |
+--------------------------+-----------+-----------+----------+
| Purchase of tangible | (59) | (14) | (50) |
| assets | | | |
+--------------------------+-----------+-----------+----------+
| Proceeds from sale of | 52 | - | - |
| tangible assets | | | |
+--------------------------+-----------+-----------+----------+
| Interest received | 149 | 190 | 333 |
+--------------------------+-----------+-----------+----------+
| Cash flow from investing | 142 | 176 | 283 |
| activities | | | |
+--------------------------+-----------+-----------+----------+
| | | | |
+--------------------------+-----------+-----------+----------+
| Cash flow from financing | | | |
| activities | | | |
+--------------------------+-----------+-----------+----------+
| Proceeds from issuance | - | 945 | 8,446 |
| of ordinary share | | | |
| capital | | | |
+--------------------------+-----------+-----------+----------+
| Costs arising from | - | - | (331) |
| shares issued | | | |
+--------------------------+-----------+-----------+----------+
| Purchase of own shares | - | (312) | (312) |
+--------------------------+-----------+-----------+----------+
| Sale of own shares | 166 | 142 | 149 |
+--------------------------+-----------+-----------+----------+
| Increase in bank loans | 28,624 | 19,054 | 33,272 |
+--------------------------+-----------+-----------+----------+
| Repayment of bank loans | (23,825) | (45,338) | (75,116) |
+--------------------------+-----------+-----------+----------+
| Dividend paid | (621) | - | (295) |
+--------------------------+-----------+-----------+----------+
| Capital element of hire | (5) | (17) | (18) |
| purchase payments | | | |
+--------------------------+-----------+-----------+----------+
| Cash flow from financing | 4,339 | (25,526) | (34,205) |
| activities | | | |
+--------------------------+-----------+-----------+----------+
| | | | |
+--------------------------+-----------+-----------+----------+
| Net (decrease) increase | (11,655) | 10,208 | 28,777 |
| in cash and cash | | | |
| equivalents | | | |
+--------------------------+-----------+-----------+----------+
| Cash and cash | 33,642 | 4,865 | 4,865 |
| equivalents brought | | | |
| forward | | | |
+--------------------------+-----------+-----------+----------+
| Cash and cash | 21,987 | 15,073 | 33,642 |
| equivalents carried | | | |
| forward | | | |
+--------------------------+-----------+-----------+----------+
NOTES
+----------------------------------------------------------+
| 1 Basis of preparation |
+----------------------------------------------------------+
| |
+----------------------------------------------------------+
| The interim accounts 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 2011 or are expected to be endorsed and |
| effective at 31 March 2011. |
| |
| The interim accounts do not constitute statutory |
| accounts within the meaning of Section 434 of the |
| Companies Act 2006. The figures for the half years |
| ended 30 September 2010 and 30 September 2009 are |
| unaudited. The interim accounts were approved by the |
| directors on 30 November 2010 and have 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 accounts. |
| |
| The Group's statutory accounts for the year ended 31 |
| March 2010 were approved by the Board of directors on 25 |
| May 2010, 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 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 2010. |
+----------------------------------------------------------+
+----------------------------------------------------------+
| 2 Accounting policies |
+----------------------------------------------------------+
+----------------------------------------------------------+
| Accounting convention |
| The interim accounts have been prepared under the |
| historical cost convention and on a basis consistent |
| with the accounting policies in the financial statements |
| for the year ended 31 March 2010. |
+----------------------------------------------------------+
| |
+----------------------------------------------------------+
+----------------------------------------------------------+
| 3 Exceptional items |
+----------------------------------------------------------+
| |
+----------------------------------------------------------+
| The exceptional item for the six months ended 30 |
| September 2010 of GBP0.5 million is a 'bargain gain' |
| arising as a result of the purchase of the remaining 50% |
| of the ordinary shares in Telford Homes (Creekside) |
| Limited in the period (note 7). |
| |
| The exceptional items for the six months ended 30 |
| September 2009 and the year ending 31 March 2010 of |
| GBP0.8 million include GBP0.7 million where the net |
| realisable value of land and work in progress on certain |
| developments has been assessed to be lower than the |
| costs originally recorded in inventories as a result of |
| the deterioration in market conditions. The remaining |
| GBP0.1 million relates to redundancy costs. |
+----------------------------------------------------------+
+----------------------------------------------------------+
| 4 Taxation |
+----------------------------------------------------------+
| |
+----------------------------------------------------------+
| Taxation has been calculated on the profit for the six |
| months ended 30 September 2010 at the estimated |
| effective tax rate of 18.3% before movements in deferred |
| taxation (September 2009: 28.5%). The 'bargain gain' |
| arising on the acquisition of 50% of the issued share |
| capital of Telford Homes (Creekside) Limited is not |
| subject to taxation (note 7). |
+----------------------------------------------------------+
+----------------------------------------------------------+
| 5 Dividends |
+----------------------------------------------------------+
| |
+----------------------------------------------------------+
| The interim dividend declared for the six months ended |
| 30 September 2010 is 1.25 pence per ordinary share and |
| is expected to be paid on 14 January 2011 to those |
| shareholders on the register at the close of business on |
| 17 December 2010. This dividend was declared after 30 |
| September 2010. |
| |
| The interim dividend paid for the six months ended 30 |
| September 2009 was 0.75 pence per ordinary share and the |
| final dividend paid for the year ended 31 March 2010 was |
| 1.25p per ordinary share. |
+----------------------------------------------------------+
+----------------------------------------------------------+
| 6 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: |
+----------------------------------------------------------+
+------------------------+--------------+--------------+--------------+
| | 6 months | 6 months | Year |
| | ended | ended | ended |
| | 30 | 30 | 31 |
| | September | September | March |
| | 2010 | 2009 | 2010 |
+------------------------+--------------+--------------+--------------+
| | | | |
+------------------------+--------------+--------------+--------------+
| Weighted average | 47,791,838 | 38,759,959 | 38,804,588 |
| number of shares in | | | |
| issue | | | |
+------------------------+--------------+--------------+--------------+
| Dilution - effect of | 713,025 | 472,283 | 689,918 |
| share schemes | | | |
+------------------------+--------------+--------------+--------------+
| Diluted weighted | 48,504,863 | 39,232,242 | 39,494,506 |
| average number of | | | |
| shares in issue | | | |
+------------------------+--------------+--------------+--------------+
| | | | |
+------------------------+--------------+--------------+--------------+
| Profit on ordinary | GBP1,582,000 | GBP4,105,000 | GBP5,319,000 |
| activities after | | | |
| taxation | | | |
+------------------------+--------------+--------------+--------------+
| | | | |
+------------------------+--------------+--------------+--------------+
| Earnings per share: | | | |
+------------------------+--------------+--------------+--------------+
| Basic | 3.3p | 10.6p | 13.7p |
+------------------------+--------------+--------------+--------------+
| Diluted | 3.3p | 10.5p | 13.5p |
+------------------------+--------------+--------------+--------------+
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 7 Business combination |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| |
| On 17 September 2010, the Group acquired 50% of the issued share capital of Telford Homes (Creekside) Limited, a property development company currently developing land in Greenwich, London. Following the acquisition, the Group owns 100% of the ordinary shares of Telford Homes (Creekside) Limited and has sole control of the company. |
| |
| The book value and fair value of the assets and liabilities of Telford Homes (Creekside) Limited at the date of acquisition are set out below: |
| |
| Book and fair 50% acquired |
| value |
| GBP000 GBP000 |
| Inventories 58,716 29,358 |
| Cash 2,414 1,207 |
| Trade and other (28,102) (14,051) |
| payables |
| Borrowings (32,006) (16,003) |
| Net assets 1,022 511 |
| |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
+----------------------------------------------------------+
| 8 Repurchase and cancellation of shares |
+----------------------------------------------------------+
| |
+----------------------------------------------------------+
| On 30 September 2010 the Company repaid all outstanding |
| loan notes in relation to the acquisition of Clifford |
| Contracting Limited which took place on 23 June 2009. |
| This final repayment amounted to GBP4.3 million. |
| |
| As a result of the loan notes being repaid the Company |
| immediately exercised its option to repurchase 1,130,089 |
| ordinary shares from the vendors of Clifford Contracting |
| Limited for a total sum of GBP1. These repurchased |
| shares were cancelled on 30 September 2010 and the total |
| shares in issue therefore reduced from 49,775,000 to |
| 48,644,911. |
+----------------------------------------------------------+
+----------------------------------------------------------+
| 9 Interim report |
+----------------------------------------------------------+
| |
| Copies of this announcement are available from the Group |
| at First Floor, Stuart House, Queensgate, Britannia |
| Road, Waltham Cross, Hertfordshire EN8 7TF. The Group's |
| interim report for the six months ended 30 September |
| 2010 will be posted to shareholders shortly and will be |
| available on our website at www.telfordhomes.plc.uk. |
+----------------------------------------------------------+
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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