TIDMSAF
RNS Number : 4878Y
Safeland PLC
21 August 2018
The following amendment has been made to the ' Final Results for
the Year Ended 31 March 2018' announcement released on 21 August
2018 at 7.00 a.m. under RNS No 3522Y.
The Company's final dividend will be payable on 28 September
2018 to shareholders on the Company's register of members at the
close of business on 31 August 2018 (not 24 August 2018 as
previously announced).
All other details remain unchanged.
The full amended text is shown below.
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Safeland plc
("Safeland", the "Company" or the "Group")
Final Results for the Year Ended 31 March 2018
Managing Director's Statement
Key Achievements
I am pleased to report on another successful year, albeit that
the year to 31 March 2018 saw lower levels of turnover and profit
after tax, but higher operating profit and profit before tax, than
the preceding year.
We paid a final dividend of 1p per share in respect of the year
ended 31 March 2017, which was paid during this financial year. We
are pleased to continue the trend of distributing a share of
profits to our shareholders by recommending the payment of a final
dividend of 1p per share which, subject to shareholders' approval
at the Company's Annual General Meeting, will be payable on 28
September 2018 to shareholders on the register of members at close
of business on 31 August 2018.
During the year, the Group sold its residual interest in two
properties in London and purchased and sold a mixed-use property
asset in London NW9. These disposals generated total revenues of
GBP2.8m. Towards the end of the year, work completed on two
projects - the redevelopment of a former hotel in Muswell Hill into
18 apartments and the construction of 3 residential properties near
our head office in London N2; both projects were fully let within
the first quarter of this financial year.
Planning permission was obtained for the building of a mixed
residential and commercial development in London N2, and work
commenced on a conversion to apartments of a property in London
N10.
Financial Results
Group revenue for the year to 31 March 2018 of GBP2.9 million
comprised sales of properties, rental income and management fees.
However, it was below the GBP13.0 million reported for the
preceding year, in which there was more activity.
Gross profit of GBP0.3 million was below the GBP2.5 million for
the year to 31 March 2017, but operating profit increased from
GBP1.9 million to GBP2.7 million, reflecting the gain on
revaluation of investment properties, including those transferred
this year from trading stock. However, it is worth noting that we
are extremely selective on transactions until the outlook on the
economy in general and the property sector specifically, show signs
of strengthening.
As a result of the completion of the two projects mentioned
above, both properties were transferred from stock into investment
properties and were valued at a gain to the Group of GBP3.8
million. As a result, trading stock has decreased in value from
GBP9.3 million at 31 March 2017 to GBP5.0 million at 31 March 2018.
The Statement of Financial Position shows gearing at 31 March 2018
of 45%, which is consistent with the long term gearing ratio of the
Group (31 March 2017: 12%).
I am pleased to report that our net asset value (NAV) rose from
GBP19.9 million (equivalent to 129 pence per share) at 31 March
2017, to GBP21.6 million (equivalent to 145 pence per share) at 31
March 2018. This is an 11.6% increase, albeit that for the third
consecutive year there were fewer shares in issue at the year-end
than 12 months previously, as a result of buybacks and cancellation
of shares.
Continuing the theme of purchasing our own shares - in the prior
year, there had been two transactions totalling 193,000 shares - in
the year to 31 March 2018, we made 8 buy-backs, totalling 460,000
shares. The directors continue to consider that the acquisition and
cancellation of these shares as appropriate if it enhances the
value of the remaining shares in issue.
Due to the small increase in the share price over the year,
total shareholder returns for the year increased by 6.4% (2017:
2.7% decrease).
After the year end, we successfully negotiated a new GBP16.5
million revolving credit facility with Lloyds Bank, secured on
certain assets owned by the Group.
Outlook
I repeat the statement in 2017's full-year results that the
market appears to us to be constrained by an economic outlook which
in turn is affected by political conditions at home, in the EU, and
worldwide. I believe that this has created a cautious environment,
verging on stagnation which may continue for some time.
Whilst we will continue to seek out value adding opportunities,
the generally negative environment with little current opportunity
suggests that it would be prudent for the Board to review the
Company's cost base, including the value of maintaining the
Company's AIM quotation. A further announcement will be made in due
course.
Larry Lipman
Managing Director
20 August 2018
Enquiries
+44 (0) 20 8815
Safeland plc 1600
Larry Lipman, Managing Director
Stockdale Securities (Nominated
Adviser and Broker)
+44 (0) 20 7601
Tom Griffiths 6100
For more information visit: www.safeland.co.uk
Condensed Consolidated Income Statement
Year Ended 31 March 2018
Note 2018 2017
GBP'000 GBP'000
Revenue
Continuing 3 2,900 12,695
Discontinued 3 - 277
-------- --------
2,900 12,972
Cost of sales (2,595) (10,517)
-------- --------
Gross profit 305 2,455
Administrative expenses (1,577) (1,721)
Gain on revaluation of investment
properties 3,833 459
Profit on disposal of investment
property 74 694
Dividend from investment 11 5
Share of results of associate 25 31
-------- --------
Operating profit 2,671 1,923
-------- --------
Operating profit - continuing 2,671 1,877
Operating profit - discontinued - 46
-------- --------
2,671 1,923
-------- --------
Finance income 148 554
Finance costs (426) (448)
-------- --------
Profit before tax 2,393 2,029
Tax (247) 293
-------- --------
Profit for the financial year
attributable to owners of the
parent company 2,146 2,322
======== ========
Basic earnings per share 4 14.25p 15.27p
Diluted earnings per share 4 7.88p 8.35p
Condensed Consolidated Statement of Comprehensive Income
Year ended 31 March 2018
2018 2017
GBP'000 GBP'000
Profit for the year 2,146 2,322
-------- --------
Other comprehensive income
Fair value losses on available-for-sale
financial assets (104) (30)
Other comprehensive income
for the year, net of tax (104) (30)
-------- --------
Total comprehensive income
for the year attributable
to owners of the parent company 2,042 2,292
======== ========
Condensed Consolidated Statement of Financial Position
31 March 2018
Note 2018 2017
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 1,789 1,885
Investment properties 6 14,762 1,182
Investment in associate 127 127
Available-for-sale investments 698 802
Total non-current assets 17,376 3,996
-------- --------
Current assets
Trading properties 7 5,018 9,348
Trade and other receivables 8 9,238 9,209
Cash and cash equivalents 1,066 5,280
-------- --------
Total current assets 15,322 23,837
-------- --------
Total assets 32,698 27,833
-------- --------
Current liabilities
Bank loans and overdrafts 9 10,455 7,639
Trade and other payables 470 232
Corporation tax payable 140 -
-------- --------
Total current liabilities 11,065 7,871
-------- --------
Non-current liabilities
Bank loans - -
Deferred income tax liabilities 74 32
-------- --------
Total non-current liabilities 74 32
-------- --------
Total liabilities 11,139 7,903
-------- --------
Net assets 21,559 19,930
======== ========
Equity
Share capital 745 768
Share-based payment reserve 354 354
Investment revaluation reserve (186) (82)
Capital redemption reserve 98 75
Retained earnings 20,548 18,815
-------- --------
Total equity attributable to
owners of the parent company 21,559 19,930
======== ========
Condensed Consolidated Statement of Changes in Equity
31 March 2018
Share Capital Share-based Investment Retained Total
Capital redemption payment revaluation earnings equity
reserve reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ----------- ----------- ------------ --------- --------
Balance at
1 April 2016 778 65 354 (52) 16,601 17,746
-------- ----------- ----------- ------------ --------- --------
Comprehensive
income
Profit for
the year - - - - 2,322 2,322
Revaluation
of available-for-sale
investments - - - (30) - (30)
-------- ----------- ----------- ------------ --------- --------
Total comprehensive
income - - - (82) 2,322 2,292
-------- ----------- ----------- ------------ --------- --------
Transactions
with owners
Purchase of
own shares (10) 10 - - (108) (108)
-------- ----------- ----------- ------------ --------- --------
Total transactions
with owners (10) 10 - - (108) (108)
-------- ----------- ----------- ------------ --------- --------
Balance at
31 March 2017 768 75 354 (82) 18,815 19,930
-------- ----------- ----------- ------------ --------- --------
Comprehensive
income
Profit for
the year - - - - 2,146 2,146
Revaluation
of available-for-sale
investments - - - (104) - (104)
---- --- ----- ------ ------
Total comprehensive
income - - - (104) 2,146 2,042
---- --- ----- ------ ------
Transactions
with owners
Dividend paid - - - - (151) (151)
Purchase of
own shares (23) 23 - - (262) (262)
---- --- ----- ------ ------
Total transactions
with owners (23) 23 - - (413) (413)
---- --- ----- ------ ------
Balance at
31 March 2018 745 98 354 (186) 20,548 21,559
---- --- ----- ------ ------
Condensed Consolidated Statement of Cash Flows
Year ended 31 March 2018
2018 2017
GBP'000 GBP'000
Operating activities
Cash (outflow)/inflow from operations (6,274) 6,523
Interest paid (395) (406)
Corporation tax paid (65) (1,464)
-------- --------
Net cash (outflow)/inflow from operating
activities (6,734) 4,653
-------- --------
Investing activities
Interest received 5 1
Purchase of property, plant and
equipment (44) (143)
Other dividends received 36 31
Proceeds from sale of investment
properties 72 1,094
Proceeds from sale of property,
plant and equipment 79 94
-------- --------
Net cash generated from investing
activities 148 1,077
-------- --------
Financing activities
Purchase of own share capital (262) (108)
Dividends paid to equity shareholders (151) -
New loans 2,785 2.001
Loan repayments - (5,331)
Net cash from/(used in) financing
activities 2,372 (3,438)
-------- --------
Net (decrease)/increase in cash
and cash equivalents (4,214) 2,292
Cash and cash equivalents at beginning
of year 5,280 2,988
Cash and cash equivalents at end
of year 1,066 5,280
======== ========
Notes
31 March 2018
1. Basis of preparation
On 20 August 2018, the Directors approved this announcement for
publication. Copies of this announcement are available from the
Company's registered office at 1a Kingsley Way, London, N2 0FW and
on its website, www.safeland.co.uk. The Annual Report and Accounts
will be sent to shareholders in due course and will be available on
the Company's website, www.safeland.co.uk. The financial
information presented above does not constitute statutory financial
statements as defined by section 435 of the Companies Act 2006 for
the year ended 31 March 2018. The financial information for the
year ended 31 March 2017 has been derived from the Group's
statutory accounts for that year, as filed with the Registrar of
Companies.
The financial information for the year ended 31 March 2018 is
derived from the statutory financial statements for that year,
prepared under IFRS, upon which the auditors have reported. The
audit report was unqualified, did not include references to matters
to which the auditor drew attention by way of emphasis without
qualifying their report and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006. The statutory
financial statements for the year ended 31 March 2018 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The accounting policies applied in this announcement are
consistent with those of the annual financial statements for the
year ended 31 March 2017, as described in those annual financial
statements.
2. Significant Accounting Policies
Revenue
Revenue is stated net of VAT and comprises rental income,
proceeds from sales of trading properties, fees, commissions and
other income.
Sales of trading properties are recognised on completion of a
contract. This reflects the point of transfer of risk and rewards
when trading property is sold.
Rental income from investment and trading properties leased out
under operating leases is recognised in the Income Statement on a
straight-line basis over the term of the lease. Contingent rents
which comprise turnover rents are recognised as income in the
periods in which they are earned. Rent reviews are recognised when
such reviews have been agreed with tenants. Lease incentives are
recognised as an integral part of the net consideration for the use
of the property and amortised on a straight-line basis over the
term of lease, or the period to the first tenant break, if
shorter.
Hotel revenue comprised revenues from overnight hotel
accommodation, banqueting facility hire and sales of food and
beverages. All revenue was recognised when the service was
provided. The hotel closed and ceased to trade in the prior year on
3 August 2016.
Other fees in relation to property management are recognised on
a straight-line basis over the term of management contracts.
Investment properties
Investment properties are those properties that are held either
to earn rental income or for capital appreciation or both.
Investment properties are measured and stated at fair value in the
statement of financial position. Valuation surpluses and deficits
arising in the year are included in the consolidated income
statement.
The gain or loss arising on the disposal of a property is
determined as the difference between the sales proceeds and the
fair value of the asset at the beginning of the period and is
recognised in the consolidated income statement.
Investment properties developed by the Group are transferred
from current assets at cost with the gain or loss on valuation
being recorded in the consolidated income statement.
Investment properties may be freehold properties or leasehold
properties. For leasehold properties that are classified as
investment properties, the associated leasehold obligations, if
material, are accounted for as finance lease obligations.
Trading properties
Properties held for development and resale are classified as
trading properties and are shown at the lower of cost and net
realisable value. Cost comprises purchase price, acquisition costs
and direct expenditure.
3. Operational Segments
All activities are based in the United Kingdom.
The segmental information of the Group's results for the year
ended 31 March 2018 was as follows:
Property Property Unallocated Total
trading investment GBP'000 GBP'000
& management GBP'000
GBP'000
------------- ------------ ------------ ---------
Revenue 2,850 50 - 2,900
Cost of sales (2,595) - - (2,595)
------------- ------------ ------------ ---------
Gross profit 255 50 - 305
Profit on disposal
of investment
properties - 74 - 74
Gain on revaluation
of investment
properties - 3,833 - 3,833
Share of profit
of associate 25 - - 25
Operating profit
before administration
expense 280 3,957 - 4,237
Administrative
expenses - - (1,577) (1,577)
Dividend from
investments - - 11 11
Finance income - - 148 148
Finance costs - - (426) (426)
------------- ------------ ------------ ---------
Profit before
tax 280 3,957 (1,844) 2,393
============= ============ ============ =========
Property Property Unallocated Total
trading investment GBP'000 GBP'000
& management GBP'000
GBP'000
------------- ------------ ------------ ---------
Segment assets 15,081 14,762 2,855 32,698
Segment liabilities (3,072) (6,649) (1,418) (11,139)
------------- ------------ ------------ ---------
Net assets 12,009 8,113 1,437 21,559
------------- ------------ ------------ ---------
Capital expenditure - - 44 44
------------- ------------ ------------ ---------
Depreciation - - 79 79
------------- ------------ ------------ ---------
The segmental information of the Group's results for the year
ended 31 March 2017 was as follows:
Property Property Unallocated(1) Total
trading investment GBP'000 GBP'000
& management GBP'000
GBP'000
--------------- ------------ --------------- -----------
Revenue 12,480 215 277 12,972
Cost of sales (10,286) - (231) (10,517)
--------------- ------------ --------------- -----------
Gross profit 2,194 215 46 2,455
Profit on disposal
of investment
properties - 694 - 694
Gain on revaluation
of investment
properties - 459 - 459
Share of profit
of associate 31 - 31
Operating profit
before administration
expense 2,225 1,368 46 3,639
Administrative
expenses - - (1,721) (1721)
Dividends from
investments - - 5 5
Finance income - - 554 554
Finance costs - - (448) (448)
--------------- ------------ --------------- -----------
Profit before
tax 2,225 1,368 (1,564) 2,029
=============== ============ =============== ===========
Property Property Unallocated(1) Total
trading investment GBP'000 GBP'000
& management GBP'000
GBP'000
-------------- ------------ --------------- ---------
Segment assets 18,583 1,182 8,068 27,833
Segment liabilities (7,639) - (264) (7,903)
-------------- ------------ --------------- ---------
Net assets 10,944 1,182 7,804 19,930
-------------- ------------ --------------- ---------
Capital expenditure - - 5 5
-------------- ------------ --------------- ---------
Depreciation - - 81 81
-------------- ------------ --------------- ---------
(1) The hotel business ceased to operate in the year ended 31
March 2017 with effect from 3 August 2016 and has been closed
permanently. Its results for 2017 have been included within
unallocated.
4. Earnings per Share
The calculation of the basic and diluted earnings per share is
based on the following data:
2018 2017
GBP'000 GBP'000
Profit for the year attributable
to equity holders of the Company 2,146 2,322
======== ========
2018 2017
Number Number
Weighted average number of ordinary
shares for the purposes of basic
earnings per share (continued and
discontinued) 15,042,243 15,555,095
Effect of dilutive potential ordinary
shares 12,148,658 12,042,793
----------- -----------
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share 27,190,901 27,597,888
=========== ===========
5. Dividends
The Directors recommend the payment of a final dividend of 1
penny per share (2017: 1p), which, subject to shareholders'
approval at the Company's Annual General Meeting, will be payable
on 28 September 2018 to shareholders on the Company's register of
members at the close of business on 31 August 2018. During the
year, no interim dividend was paid (2017: nil pence per share).
6. Investment Properties
2018 2017
GBP'000 GBP'000
Fair value
At 1 April 1,182 1,123
Transfer from current properties 9,747 -
Disposal of properties in the year - (400)
Increase in fair value during the
year 3,833 459
-------- --------
At 31 March 14,762 1,182
======== ========
The fair value of the investment properties at 31 March 2018
comprises freehold properties of GBP13,832,000 (2017: GBP457,000)
and long leasehold properties of GBP930,000 (2017: GBP725,000). The
leasehold and freehold investment property have been classified
within level 3 of the fair value hierarchy (unobservable inputs).
The transfer from current properties developed by the group was at
cost.
The investment properties consist of residential property
located in North London and have been valued by the Directors. The
methodology to value these properties is to compare historical
comparable market transactions less a percentage reduction to
reflect the limitations of restrictive tenancies where appropriate.
Based on valuations at 31 March 2018, if the percentage reduction
was 5% higher or lower and all other variables were held constant,
the Group's profit before tax would increase or decrease by
8.5%.
The Group has pledged investment properties with a carrying
value of GBP14,762,000 (2017: GBP1,182,000) to secure banking
facilities granted to the Group.
The fair value of the Group's investment properties at 31 March
2018 had been arrived at on the basis of market value as defined in
the Apportionment and Valuation Manual of the Royal Institution of
Chartered Surveyors.
The historical cost of investment properties included in the
financial statements at 31 March 2018 is GBP10,578,000 (2017:
GBP831,000) of which GBP10,035,000 (2017: GBP288,000) are freehold
and GBP543,000 (2017: GBP543,000) are long leasehold
properties.
7. Trading Properties
2018 2017
GBP'000 GBP'000
Properties for resale 5,018 9,348
======== ========
The Group has pledged properties for resale with carrying value
of GBP5,012,000 (2017: GBP9,113,000) to secure banking facilities
granted to the Group.
Properties for resale were reviewed for impairment as at 31
March 2018; the Directors are satisfied that no impairment is
necessary.
Trading properties are properties acquired or developed and held
for sale and are shown at the lower of cost or net realisable
value. The cost of trading properties are those costs directly
associated with the acquisition and development of a specific site.
Net realisable value is the estimated selling price in the ordinary
course of business less estimated costs to completion and the
estimated costs necessary to make the sale.
8. Trade and Other Receivables
2018 2017
GBP'000 GBP'000
Trade receivables 5 80
Other receivables 9,208 9,122
Prepayments and accrued income 25 7
9,238 9,209
========= =========
The directors consider that the carrying amount of trade and
other receivables is no less than their fair value. Of the other
receivables, GBP9,200,000 (2017: GBP9,058,000) is deferred
consideration on the sale of the Chandos Tennis Club. Although this
was past due at the balance sheet date, this amount has not been
impaired as the Group took possession of the properties after the
year end (see note 10)
9. Bank Loans
2018 2017
GBP'000 GBP'000
Bank loans 10,455 7,670
Unamortised borrowing costs - (31)
--------- ---------
10,455 7,639
--------- ---------
There were no breaches of bank loan covenants as at 31 March
2018 or 31 March 2017.
All of the Group's bank loans and overdrafts disclosed above
comprise borrowings in sterling.
The bank loans are secured on investment and trading properties
owned by the Group totalling GBP19,744,000 (2017:
GBP10,295,000).
The Group had undrawn committed borrowing facilities as at 31
March 2018 of GBP2,045,000 (2017: GBP4,830,000).
At 31 March 2018, the Group had a GBP12,500,000 (2017:
GBP12,500,000) revolving credit facility with Lloyds Bank plc,
secured on certain properties owned by the Group. The facility was
based on LIBOR plus a fixed margin. The Group renewed the facility
during April 2018 under similar terms as the original facility, but
with a limit of GBP16,500,000. At 31 March 2018, a notional amount
of the loan of GBP5,000,000 (2017: GBP5,000,000) was capped at
3%.
10. Post balance-sheet events
In April 2018 the Group negotiated a renewal of the Group's
revolving credit facilities with its principal lender. This will
provide the Group with a GBP16,500,000 facility through to December
2020.
During May 2018, four investment properties valued at
GBP1,455,000 at 31 March 2018, were disposed of for a small
profit.
During June 2018, the Group took possession of the four houses
as part and final consideration on sale of the Chandos Tennis Club.
The consideration payable for the sale in 2014 comprised GBP4.0
million in cash (which was received in 2014) and the balance was to
be satisfied by way of transfer to Safeland of four detached houses
(valued at the time by the Company's directors in aggregate at
GBP9.2 million) in the completed development.
During the three months to June 2018, all 3 houses in the
Edeleny Close development and all 18 apartments in the Raglan Hall
development were let to third parties at a total annual rental of
GBP525,000.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EAKPFADFPEFF
(END) Dow Jones Newswires
August 21, 2018 13:00 ET (17:00 GMT)
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