TIDMTEF
RNS Number : 1512I
Telford Homes PLC
28 May 2014
Press Release 28 May 2014
Telford Homes Plc
("Telford Homes" or the "Group")
Preliminary Results
Telford Homes Plc (AIM:TEF), the London-focused residential
property developer, today announces its preliminary results for the
year ended 31 March 2014.
Highlights
-- Buoyant London market with contracts exchanged
for the sale of 515 open market properties
in the year, further increasing the Group's
pre-sold position
-- 98 per cent of expected open market completions
for the year to March 2015 forward sold,
over 70 per cent for FY16 and over 25
per cent for FY17, enabling the Group
to control risk and enhancing profit and
cash flow visibility
-- All sales secured without assistance from
the 'Help to Buy' initiative or any other
government backed mortgage scheme
-- Operating in areas of London where demand
exceeds supply and where people want to
live and can afford to live
-- Strong current trading with over GBP70
million of apartments sold at Stratford
Central, E15 over the last four weeks
-- Substantial increase in operating margin
to 17.1 per cent (2013: 9.7 per cent)
-- Profit before tax more than doubled to
GBP19.2 million (2013: GBP9.0 million)
-- Proposed final dividend of 5.1 pence bringing
the total to 8.8 pence for the year (2013:
4.8 pence), an increase of 83 per cent
-- GBP20 million equity raised in June 2013,
along with over GBP45 million of deposits
received from forward sales, driving investment
in new opportunities
-- Development pipeline anticipated to deliver
future revenue of more than GBP875 million
(2013: GBP627 million), a 40 per cent
increase and over six times the revenue
recognised in the year to 31 March 2014
-- Net cash balance at 31 March 2014 and
zero gearing (2013: 47.3 per cent)
-- Board expects pre-tax profit to double
again by 31 March 2018 with a cumulative
total of more than GBP120 million anticipated
over the next four financial years
Commenting on the Preliminary Results, Jon Di-Stefano, Chief
Executive of Telford Homes, said: "I am delighted to be reporting
another excellent year for Telford Homes resulting in an enhanced
forward sold position, substantially improved margins and pre-tax
profits more than doubling. Our development pipeline has increased
to GBP875 million of future revenue, which is more than six times
the revenue reported in the year to 31 March 2014.
"Our long term growth plans are underpinned by the demand for
somewhere to live significantly exceeding the supply of new homes
in the Group's non-prime inner London locations. We are operating
in areas where people want to live and many can still afford to
live with strong demand from both owner-occupiers and tenants. Our
customers do not typically need high loan to value mortgages and we
have not made any sales under 'Help to Buy'. The Board anticipates
that cumulative pre-tax profit over the next four financial years
will be in excess of GBP120 million, positioning Telford Homes as
one of the most significant developers in London."
- Ends -
Enquiries:
Telford Homes Plc
Jon Di-Stefano, Chief Executive Tel: +44 (0) 1992
809 800
Katie Rogers, Financial www.telfordhomes.plc.uk
Director
Shore Capital
Pascal Keane / Patrick Castle Tel: +44 (0) 20
7408 4090
Media enquiries:
Abchurch
Henry Harrison-Topham / Tel: +44 (0) 20
Quincy Allan 7398 7710
quincy.allan@abchurch-group.com www.abchurch-group.com
Copies of this announcement are available from the Group at
Telford House, Queensgate, Britannia Road, Waltham Cross,
Hertfordshire EN8 7TF and on the Group's website
www.telfordhomes.plc.uk.
CHAIRMAN'S STATEMENT
I am delighted to be reporting on another excellent year for
Telford Homes during which the Group has increased its forward sold
position and more than doubled pre-tax profits. The number of
people who want to live in London continues to be far in excess of
the supply of homes and this underpins the Board's expectations of
significant growth in output and profit levels over the next few
years.
The imbalance between supply and demand in London is evidenced
by the success of the Group's sales launches where properties have
been bought within hours of being released. Throughout its history
Telford Homes has maintained a strategy of selling homes well in
advance of build completion in order to control the Group's
exposure to risk. The additional funding and enhanced security
achieved from the deposits taken on forward sales dictates the
level of investment in future developments and means the Group is
operating from a sound financial platform.
Alongside the deposits, the Group raised GBP20 million of new
equity in June 2013 from a combination of existing shareholders and
new investors. Together with bank finance this equity has been
invested in a number of attractive development opportunities and,
as a result, the Group's development pipeline has increased by 40
per cent in terms of anticipated future revenue. This pipeline is
now in excess of GBP875 million (2013: GBP627 million) which
represents more than six times the revenue recognised in the year
to 31 March 2014.
It is entirely appropriate that the Group's shareholders are
rewarded for their investment and the Board is maintaining its
policy of paying one third of earnings each year in dividends. The
final dividend proposed is 5.1 pence making a total of 8.8 pence
for the year, an increase of 83 per cent on the previous year
(2013: 4.8 pence).
Whilst the market has been favourable, the strength of the
business is down to the people who make Telford Homes successful on
a day to day basis. I would like to thank each of our employees for
their contribution this year and in particular to congratulate the
management team who are responsible not only for current
performance but also for laying the foundations for the future.
Telford Homes is now a bigger and stronger company than it has
ever been. Profits are increasing, the business is heavily forward
sold and there has been substantial investment in the development
pipeline. The Board is confident that the Group is developing in
the right place at the right time and that there is much more to
come in the years ahead.
Andrew Wiseman
Chairman
27 May 2014
CHIEF EXECUTIVE'S REVIEW
Telford Homes continues to go from strength to strength, with
considerably improved margins leading to pre-tax profit increasing
by 113 per cent to GBP19.2 million (2013: GBP9.0 million). This
represents an increase of over 500 per cent over the course of the
last two financial years and yet this is only half of the story.
The Group's forward sold position and enhanced development pipeline
are the foundations for a significant change in the operational
capacity and output of the business over the next few years.
Sales performance
The Group has continued to achieve excellent results from its
sales launches and in total exchanged contracts for the sale of 515
open market properties in the year to 31 March 2014. This exceeded
the 492 open market properties physically completed and handed over
to customers in the year thereby increasing the Group's strong
forward sold position. As at 31 March 2014 the Group was 98 per
cent sold in terms of the open market homes expected to legally
complete in the year to 31 March 2015, over 70 per cent sold for
2016 and over 25 per cent sold for 2017. Including contract revenue
from affordable housing the total value of secured but unrecognised
revenue as at 31 March 2014 was GBP341 million (2013: GBP280
million).
This has been achieved without any significant development
launches in the second half of the financial year but has since
been enhanced by the launch of Stratford Central, E15 in the last
few weeks. This development includes 157 open market apartments on
the doorstep of Stratford station and the Board is delighted to
report that 148 of these homes have already been sold for a total
value just in excess of GBP70 million. This phenomenal success has
taken place over just four weeks and includes more than 60 sales
achieved at a UK only sales launch held prior to similar events
overseas. Stratford Central is expected to be completed in the year
to 31 March 2018 and therefore the Group has now secured forward
sales four financial years ahead for the first time. The Group's
brand and reputation for exceptional quality and service are
important to this success with several sales made to repeat
purchasers. There were also a number of customers who missed out on
the apartment they wanted and are now waiting to buy at subsequent
Telford Homes' launches.
Our customers
The split of the Group's sales has changed slightly during the
year in favour of owner-occupiers and UK based investors. In the
year to 31 March 2014 the split was 35 per cent sold to
owner-occupiers, 33 per cent to UK based investors and 32 per cent
to overseas investors. The same percentages last year were 33, 28
and 39 respectively.
There has been substantial negative commentary in recent months
on the issue of marketing London property to overseas investors.
However much of this commentary is poorly informed and the Board
remains comfortable with its strategy of selling a proportion of
its homes overseas and will continue to do so in the future.
Without the ability to forward sell properties well ahead of build
completion the Group would not have been able to grow output to the
same extent and this cannot be achieved selling exclusively to
owner-occupiers.
The investors buying from Telford Homes, either UK based or
overseas, are not deliberately leaving their properties empty and
are not contributing to the shortage of supply of homes in London.
In fact the vast majority invest to secure a rental return,
therefore satisfying increasing demand from potential tenants who
either cannot afford to buy or do not want to buy.
Notwithstanding this Telford Homes has always marketed each of
its developments to UK based buyers before going overseas and the
Group has committed to continuing this practice for all future
launches.
London market
The Group's strategy is to target sales early in the development
process to control risk, enhance profit and cash flow visibility
and to enable further investment in the development pipeline. The
success of this strategy has allowed the Board to manage sales
releases to take advantage of improving prices in inner London.
Underlying price inflation in the Group's typical locations over
the past year has been between 10 and 15 per cent with the average
price of the open market homes exchanged in the year to 31 March
2014 increasing to GBP400,000 (2013: GBP353,000).
This level of price growth has led to concerns about a property
market bubble in London and yet it is important to look at the
underlying factors. There remains a significant imbalance between
the demand for somewhere to live in London and the supply of homes
and this is a fundamental issue that will continue to underpin the
market.
Inevitably this imbalance leads to increasing prices but only if
the demand is 'effective' i.e. those who want to live in London can
afford to do so. As wider economic sentiment has improved, the
availability of mortgage finance has increased and the cost has
decreased which has enabled many more purchasers to buy a home.
Mortgage providers have not returned to the days of freely
available high loan to value mortgages. Applications are still
carefully policed and therefore the conditions today for securing
finance remain very different to those in 2007.
Telford Homes continues to operate in relatively affordable
areas of inner London and a large proportion of the Group's sales
are to purchasers taking less than 80 per cent loan to value
mortgages. The Group has still not made a single sale through the
government's 'Help to Buy' scheme and is not reliant on a product
that continues to come under intense scrutiny. The Group has been
able to secure more than sufficient demand from owner-occupiers who
do not want or need high loan to value mortgages and from investors
on a similar basis.
The Board is confident that the market in the Group's specific
area of operation, which does not include prime central London, is
underpinned by the imbalance of supply and demand and remains
affordable to prospective owners and tenants.
Increasing margins
Better than expected sales prices across the Group's development
portfolio are clearly a factor in the substantial increase in both
gross profit margin and operating margin. The gross margin before
selling expenses and adjusted for any interest charges has risen to
an all-time high of 31.9 per cent (2013: 24.3 per cent) which
compares extremely favourably to the Group's internal hurdle rate
on appraising land opportunities of circa 24 per cent. The
operating margin has increased to 17.1 per cent (2013: 9.7 per
cent).
Profit on open market homes is recognised only on legal
completion and the vast majority of those completing in the year to
31 March 2014 were sold before the year began. Profit is recognised
on affordable housing as it is being built and pre-selling open
market homes at higher than expected prices increases the
anticipated profit margin on a development as a whole resulting in
a higher margin being recognised on any affordable housing.
Therefore pre-sales secured for the years to 31 March 2015, 2016
and 2017 have resulted in higher profit margins being recognised on
affordable housing contracts proceeding through the year to 31
March 2014.
The Group has also benefitted from robust control of
construction costs over the last 12 months resulting in a number of
savings on the developments completed in the year. Whilst
inflationary pressures on construction costs will undoubtedly
become more evident as activity across London increases, the Group
retains excellent relationships with its key contractors and
suppliers and is budgeting for such inflation particularly where
success on achieving forward sales is fixing the future revenue
from each scheme.
Partnerships and affordable housing
Affordable housing accounts for around a third of the homes on
each development and remains a significant contributor to financial
performance. In the year to 31 March 2014 revenue from affordable
housing represented 17.5 per cent of total revenue (2013: 18.3 per
cent). Beyond securing best value for the sale of the affordable
housing on each development, the partnerships that Telford Homes
has forged in the sector over many years have proved to be vital in
sourcing land opportunities.
A number of the Group's development sites have been purchased
from local authorities, housing associations and housing transfer
organisations and continuing strong relationships with some of
these landowners will be of great benefit as the Group appraises
opportunities to further expand its development pipeline.
Development pipeline
The Group has continued to strengthen its development pipeline
utilising the GBP20 million of equity raised in a share placing in
June 2013 together with significant deposits received from forward
sales. At 31 March 2014 Telford Homes had received deposits in
advance of the completion of open market units in excess of GBP45
million which demonstrates the scale of the forward funding
provided by the Group's sales success.
Telford Homes is predominantly developing in up and coming inner
London locations outside of the increasingly expensive prime
central London market. A strong presence in East London is now
complemented by a number of new areas with the Board's strategy
being to consider any site that is well connected to the heart of
the city. In the year to 31 March 2014 the Group has acquired two
significant sites in Stratford to develop over 500 homes between
them alongside sites of all sizes spread across Tower Hamlets,
Hackney, Islington, Lambeth, Camden, Barnet and Southwark.
As a result of these acquisitions the Group's development
pipeline as at 31 March 2014 is anticipated to deliver future
revenue of over GBP875 million compared to GBP627 million last
year, an increase of 40 per cent. Due to the differing price points
of many of the Group's developments, the Board has decided to
report the development pipeline in terms of expected future revenue
rather than unit numbers to enable comparison with current trading
levels.
The Group has significant cash balances and undrawn debt
available to fund further acquisitions. The operational set up of
the business allows Telford Homes to purchase sites delivering from
under ten homes all the way up to multiple hundreds of homes. This
not only gives the Group flexibility in terms of what to buy but
also results in a mixed portfolio appealing to a diverse range of
customers and varying construction timeframes to manage return on
capital appropriately. The Group's pre-tax return on average total
capital employed improved to 17.5 per cent in the year to 31 March
2014 (2013: 11.2 per cent).
The planning process
The Group continues to acquire a number of sites either subject
to receipt of a planning consent or unconditionally without
planning but only when the Board is confident of achieving a
satisfactory consent. Telford Homes has an excellent track record
in obtaining planning consents in a challenging environment.
Knowledge of the planning process in each London borough and
working in partnership with local authorities, the Greater London
Authority and other interested parties removes the majority of the
risk associated with the land purchase.
A number of key consents have been achieved in the last year
including 47 homes and a new church at 'Hackney Square' in Frampton
Park, 101 homes and a new school at 'Vibe' in Dalston and, after a
planning appeal and some careful negotiation with the London
Borough of Camden, 18 homes at Allcroft Road, Camden. Alongside
Westfield, the vendors of the site, the Group also secured planning
permission for a total of 181 homes at Stratford Central earlier
this year enabling the successful marketing of the development over
the last few weeks.
Quality and customer service
The Telford Homes brand represents the consistent delivery of
high quality, desirable new homes backed up by a dedicated Customer
Service team, providing product finish and service that is second
to none. The quality of the Group's developments has been
recognised on many occasions including a number of NHBC 'Pride in
the Job' awards. Telford Homes was also the winner of 'Best Design
for four or more storeys' for Matchmakers Wharf and the prestigious
'Medium Housebuilder of the Year' at the Housebuilder Awards
2013.
During the year the Group formed a new Customer Relations team
to manage the customer's experience from the point of sale all the
way up to handover and beyond, working alongside the Sales team and
the Customer Service team. This has further enhanced the Group's
ability to look after each of its customers especially when there
is often a long period between their purchase and the ultimate
delivery of the finished home. This focus on product and service is
why Telford Homes continues to score highly on independent customer
surveys including a 98 per cent recommendation rate in 2013.
Outlook
London has one of the strongest and most robust property markets
in the world and Telford Homes is operating in the right locations
within that market where the Group's customers both want to live
and can afford to live. Sales are being achieved at increasing
prices and the Group is reporting significantly higher margins and
profits with considerable levels of forward sales already achieved
for the year to 31 March 2015 and beyond.
As reported in the Group's trading update on 16 April 2014, the
strong pre-sold position and the substantially increased
development pipeline gives good visibility over future profits.
Assuming a stable market the Board can confirm that, having more
than doubled pre-tax profit in the year to 31 March 2014, annual
pre-tax profits are expected to increase over the next four
financial years such that they more than double again by 31 March
2018. As a result the Board anticipates that cumulative pre-tax
profit over the next four financial years will be in excess of
GBP120 million positioning Telford Homes as one of the most
significant developers in London.
Jon Di-Stefano
Chief Executive
27 May 2014
FINANCIAL REVIEW
The year to 31 March 2014 has been another outstanding year for
Telford Homes with excellent growth in both margins and profits.
Sales performance continues to exceed the Board's expectations and
this has resulted in significant cash receipts from deposits such
that the Group had received GBP45.3 million of advance funding by
31 March 2014 (2013: GBP20.1 million). Cash balances of nearly
GBP33 million and headroom of over GBP90 million in its banking
facility put the Group in a strong position to construct existing
developments and further grow the development pipeline.
Operating results
Revenue was slightly down at GBP140.8 million (2013: GBP142.4
million) but gross profit increased sharply to GBP42.1 million
(2013: GBP31.4 million). Gross profit is stated after expensing
loan interest that has been capitalised within inventories of
GBP2.9 million (2013: GBP3.2 million) and before charging this
interest the gross margin in the year was substantially higher at
31.9 per cent compared to 24.3 per cent last year and 17.6 per cent
the year before.
Revenue is driven by open market completions along with
affordable housing contracts and although the number of open market
completions increased to 492 (2013: 374), a total of 244 were
within joint ventures where only 50 per cent of the revenue and
profit is recognised. A significant number of these were at
Avant-garde, the Group's joint venture with The William Pears
Group. On this development the gross margin exceeded 40 per cent
and this was a major factor in the overall increase for the
year.
The average selling price of the open market homes completed in
the year increased by 5.1 per cent to GBP329,000 (2013: GBP313,000)
but this does not reflect the underlying growth in the London
market as most of the homes were sold in previous financial
years.
The improvement in gross profit margin is mainly due to strong
market conditions and sales values being ahead of original
expectations, but in addition the Group has kept close control of
development costs and as a result cost savings have been achieved
on developments completing in the current financial year.
Administrative expenses have increased to GBP14.1 million (2013:
GBP12.9 million) predominantly due to higher employee costs as a
result of the Group undertaking more construction work in order to
deliver the expected increase in output in future years. Selling
expenses have decreased in the year from GBP7.9 million to GBP6.7
million. The accounting treatment for selling expenses is that they
must be expensed as incurred even though profit recognition from
sales occurs when each property legally completes, which can be a
number of years later. The amount expensed is therefore subject to
the timing of various development launches. The Group's normal
strategy of pre-selling homes well ahead of build completion tends
to bring forward the recognition of selling expenses. Agents'
commission forms a significant proportion of these expenses as half
of this is paid when contracts are exchanged. The more successful a
launch is the more impact it has on the current financial year.
During the year there were successful launches at Horizons and
Lime Quay accounting for nearly GBP2.5 million of the selling
expenses recognised during the year. These launches generated over
150 pre-sales of homes which are scheduled to complete in future
financial years. The selling expenses incurred in the year in
relation to these pre-sales will reduce the level of marketing
expenditure required on these developments in the future.
After accounting for these administrative and selling expenses
the Group's operating margin before any interest is charged
increased significantly to 17.1 per cent (2013: 9.7 per cent).
Finance costs
Finance costs actually incurred in the year have increased to
GBP4.5 million from GBP4.1 million. This is comprised of GBP2.1
million (2013: GBP2.2 million) of interest capitalised into work in
progress and GBP2.4 million (2013: GBP1.9 million) of finance costs
charged directly to the income statement.
Finance costs charged directly to the income statement are
predominantly non-utilisation fees, arrangement fees and hedging
costs. Increased non-utilisation fees account for most of the
increase in these costs as the facility level was increased from
GBP90 million to GBP120 million at the start of the year and the
Group has held significant cash balances throughout the year
reducing the need to draw finance under the facility.
During the year the Group has put in place some additional
protection against future interest rate rises in the form of an
interest rate swap. In effect this is a fixed interest rate for
GBP50 million of borrowing and provides cover for a two year period
commencing 1 October 2014 at a rate of 1.115 per cent (excluding
margin).
Dividend
The Board has proposed a final dividend of 5.1 pence which,
together with the 3.7 pence interim dividend paid on 10 January
2014, makes a total dividend for the year of 8.8 pence (2013: 4.8
pence). The increased dividend compared to the prior year is due to
higher earnings per share and is in line with the Board's stated
intention of paying around a third of earnings in dividends each
year. The final dividend is expected to be paid on 18 July 2014 to
those shareholders on the register at the close of business on 27
June 2014.
Balance sheet and cash
Net assets at 31 March 2014 were GBP105.4 million, increased
from GBP72.7 million last year. This is equivalent to net assets
per share of 177.4 pence (31 March 2013: 144.7 pence). There was an
equity placing in June 2013 which raised an additional GBP19.1
million (net of expenses) and together with retained profits during
the year accounts for the increase in net assets.
Cash balances increased from GBP23.7 million to GBP33.0 million
at 31 March 2014 although a significant proportion will need to be
committed to future development costs. In addition to receipts from
open market completions the Group has also benefitted from deposits
received on pre-sales. Typically Telford Homes receives a 10 per
cent deposit when contracts are exchanged and on many developments,
where sales are secured particularly early, a further 10 percent is
paid 12 months later.
Borrowings
Gross borrowings at 31 March 2014 were GBP28.1 million (2013:
GBP58.1 million) leaving the Group with a net cash position of
GBP4.8 million (2013: net debt of GBP34.4 million). As a result
gearing was zero at 31 March 2014 (2013: 47.3 per cent). Loan
drawdowns against site acquisitions and development costs amounted
to GBP21.1 million and were more than offset by repayments of
GBP49.7 million made from open market sales proceeds. Due to the
strong cash position some land and development expenditure has been
funded entirely from equity although it is anticipated that the
related loans, which remain available, will be drawn at a later
stage.
The Board continues to monitor 'uncovered gearing' which
excludes debt which would be repaid by the value of contracts
already exchanged on each development. With normal gearing at 31
March 2014 being zero clearly uncovered gearing is also zero.
However the Board expects debt to increase as more work is
undertaken and more sites are added to the development pipeline and
therefore uncovered gearing will remain an important metric of the
risk inherent in the level of indebtedness of the Group.
The Group increased the corporate loan facility to GBP120
million in April 2013 and the term was extended by two years to 30
September 2016. This facility is provided by the Group's banking
partners, being The Royal Bank of Scotland, HSBC and Santander. All
current developments, with the exception of Avant-garde are funded
by this corporate loan facility. Funds are advanced at 60 per cent
of cost and site specific funding under the overall facility
umbrella is repaid from the first 65 per cent of the open market
residential proceeds on each site. At 31 March 2014, Telford Homes
had utilised GBP28.1 million of the facility leaving a significant
unutilised balance. In addition Bishopsgate Apartments LLP, a joint
venture with The William Pears Group held a GBP43.1 million loan
facility with HSBC to fund the development of Avant-garde. This
loan was fully repaid during March 2014.
The corporate loan facility ensures that the Group has
sufficient bank finance available for all existing schemes and
headroom to purchase and develop new sites over the next few years.
It is anticipated that a further increase to the facility will be
sought in the latter part of 2015 to support the longer term growth
plans of the business.
Katie Rogers
Financial Director
27 May 2014
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2014
Year Year
Note ended ended
31 March 31 March
2014 2013
GBP000 GBP000
--------- ----------
Revenue 140,771 142,408
Cost of sales (98,701) (111,006)
Gross profit 42,070 31,402
Administrative expenses (14,143) (12,867)
Selling expenses (6,748) (7,935)
Operating profit 21,179 10,600
Finance income 409 319
Finance costs (2,358) (1,882)
Profit before income
tax 19,230 9,037
Income tax expense 3 (4,346) (2,010)
Profit after income
tax 14,884 7,027
--------- ----------
Earnings per share:
Basic 5 26.4p 14.3p
Diluted 5 25.8p 13.8p
--------- ----------
All activities are in respect of continuing operations.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2014
Year ended Year ended
31 March 31 March
2014 2013
GBP000 GBP000
----------- -----------
Movement in derivative 227 -
financial instruments
hedged
Movement in deferred (48) -
tax on derivative
financial instruments
hedged
Other comprehensive 179 -
income net of tax
(items that may be
subsequently reclassified
into profit or loss)
Profit for the year 14,884 7,027
Total comprehensive
income for the year 15,063 7,027
----------- -----------
GROUP BALANCE SHEET
AT 31 MARCH 2014
31 March 31 March
2014 2013
GBP000 GBP000
---------- ----------
Non current assets
Property, plant and
equipment 1,153 406
Financial asset 227 -
Deferred income tax
assets 852 727
---------- ----------
2,232 1,133
Current assets
Inventories 173,110 132,478
Trade and other receivables 6,590 19,377
Cash and cash equivalents 32,970 23,706
---------- ----------
212,670 175,561
Total assets 214,902 176,694
Non current liabilities
Trade and other payables (275) -
---------- ----------
(275) -
Current liabilities
Trade and other payables (79,373) (44,715)
Borrowings (28,135) (58,106)
Current income tax
liabilities (1,727) (1,141)
Hire purchase liabilities - (3)
---------- ----------
(109,235) (103,965)
Total liabilities (109,510) (103,965)
Net assets 105,392 72,729
---------- ----------
Capital and reserves
Issued share capital 5,940 5,028
Share premium 57,529 38,032
Retained earnings 41,923 29,669
Total equity 105,392 72,729
---------- ----------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2014
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- ---------
Balance at 1
April 2012 4,950 37,503 23,750 66,203
Profit for the
year - - 7,027 7,027
Movement in excess
tax on share
options - - 511 511
Dividend on equity
shares - - (1,727) (1,727)
Proceeds of equity
share issue 78 529 - 607
Share-based payments - - 229 229
Purchase of own
shares - - (483) (483)
Sale of own shares - - 362 362
Balance at 31
March 2013 5,028 38,032 29,669 72,729
Profit for the
year - - 14,884 14,884
Total other comprehensive
income
Movement in excess - - 179 179
tax on share
options - - 662 662
Dividend on equity
shares - - (3,591) (3,591)
Proceeds of equity
share issues 912 19,497 - 20,409
Share-based payments - - 212 212
Purchase of own
shares - - (547) (547)
Sale of own shares - - 455 455
Balance at 31
March 2014 5,940 57,529 41,923 105,392
--------- --------- ---------- ---------
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2014
Year Year
ended ended
31 March 31 March
2014 2013
GBP000 GBP000
--------- ---------
Cash flow from operating activities
Operating profit 21,179 10,600
Depreciation 495 236
Write down in value of
own shares 212 229
(Profit) loss on sale
of tangible assets (17) 8
(Increase) decrease in
inventories (38,536) 5,496
Decrease (increase) in
receivables 12,786 (2,551)
Increase in payables 34,748 12,752
--------- ---------
30,867 26,770
Interest paid and debt
issue costs (5,661) (3,437)
Income taxes paid (3,270) (1,414)
--------- ---------
Cash flow from operating
activities 21,936 21,919
--------- ---------
Cash flow from investing
activities
Purchase of tangible assets (1,250) (272)
Proceeds from sale of
tangible assets 25 3
Interest received 409 319
--------- ---------
Cash flow from investing
activities (816) 50
--------- ---------
Cash flow from financing
activities
Proceeds from issuance
of ordinary share capital 20,409 607
Purchase of own shares (547) (483)
Sale of own shares 455 362
Increase in bank loans 21,114 37,077
Repayment of bank loans (49,693) (46,502)
Dividend paid (3,591) (1,727)
Capital element of hire
purchase payments (3) (16)
--------- ---------
Cash flow from financing
activities (11,856) (10,682)
--------- ---------
Net increase in cash and
cash equivalents 9,264 11,287
Cash and cash equivalents
brought forward 23,706 12,419
--------- ---------
Cash and cash equivalents
carried forward 32,970 23,706
--------- ---------
NOTES
1 Basis of preparation
The financial information set out above
does not constitute statutory accounts
for the year ended 31 March 2014 or 2013
but is derived from those accounts. Statutory
accounts for the year ended 31 March 2013
have been delivered to the Registrar of
Companies and the statutory accounts for
the year ended 31 March 2014 will be delivered
to the Registrar of Companies and sent
to all shareholders shortly. The auditors
have reported on those accounts; their
reports were unqualified, did not draw
attention to any matters by way of emphasis
without qualifying their report and did
not contain statements under Section 498
(2) or (3) of the Companies Act 2006 or
equivalent preceding legislation.
The statutory accounts for the year ended
31 March 2014, including the comparative
information for the year ended 31 March
2013 have been prepared in accordance with
International Financial Reporting Standards
(IFRS) including International Accounting
Standards (IAS) and International Financial
Reporting Interpretations Committee (IFRIC)
interpretations as adopted for use in the
European Union and with those parts of
the Companies Act 2006 applicable to companies
reporting under IFRS.
2 Accounting policies
Accounting convention
The statutory accounts for the year ended
31 March 2014 have been prepared under
historical cost convention as modified
for reassessment of derivatives at fair
value and on a basis consistent with the
accounting policies in the financial statements
for the year ended 31 March 2013. The accounting
policies will be disclosed in full within
the Group's forthcoming financial statements.
3 Taxation
Taxation has been calculated on the profit
for the year ended 31 March 2014 at the
estimated effective tax rate of 22.6% (2013:
22.2%).
4 Dividend paid Year ended Year ended
31 March 31 March
2014 2013
GBP000 GBP000
--------------------------------- ---------- ----------
Final dividend paid in July
2013 of 2.8p (July 2012: 1.5p) 1,415 743
Interim dividend paid in January
2014 of 3.7p (January 2013:
2.0p) 2,184 1,000
3,599 1,743
--------------------------------- ---------- ----------
The final dividend proposed for the year
ended 31 March 2014 is 5.1 pence per ordinary
share. This dividend was declared after
31 March 2014 and as such the liability
of GBP3,029,400 has not been recognised
at that date.
5 Earnings per share
Basic earnings per share is calculated
by dividing the earnings attributable to
ordinary shareholders by the weighted average
number of ordinary shares outstanding during
the year, excluding those held in the Share
Incentive Plan. 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:
Year ended Year ended
31 March 31 March
2014 2013
Weighted average number
of shares in issue 56,273,560 49,162,688
Dilution - effect of share
schemes 1,500,486 1,598,135
------------------------------ ------------- ------------
Diluted weighted average
number of shares in issue 57,774,046 50,760,823
Profit on ordinary activities
after taxation GBP14,884,000 GBP7,027,000
Earnings per share:
Basic 26.4p 14.3p
Diluted 25.8p 13.8p
------------------------------ ------------- ------------
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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